Dixon Technologies shares in focus as arm bags Lenovo contract to produce laptops under PLI 2.0
Dixon Tech is design-focused and solutions company engaged in manufacturing products in the consumer durables, lighting and mobile phones markets in India.
- Dec 12, 2023,
- Updated Dec 12, 2023 9:02 AM IST
Shares of Dixon Technologies (India) Ltd will be in focus today after the company post market hours of Monday said its wholly-owned subsidiary Padget Electronics Private Limited bagged a manufacturing contract by Lenovo to carry out manufacturing of IT Hardware products including notebooks and laptops under the production linked incentive (PLI) 2.0 scheme, subject to signing of definitive agreement in due course.
Dixon Tech is design-focused and solutions company engaged in manufacturing products in the consumer durables, lighting and mobile phones markets in India. It manufactures LED TVs, washing machines, mobile phones, CCTV & DVRs, medical equipment, wearables and lighting products such as LED bulbs and tubelights.
The stock closed at Rs 6,372.15 apiece on Monday, up 6.83 per cent. It is up 63.42 per cent year-to-date. That said, the scrip has an average target price of Rs 5,404, as per publicly available data with Trendlyne, which suggests a potential 15 per cent downside. ICICI Securities has a target of Rs 4,900 on the stock. Kotak Institutional Equities sees the fair value of the stock even lower at Rs 4,200.
"With Dixon planning to achieve Rs 48,000 crore in revenue from IT hardware over the next 6 years; this implies a share of nearly 17 per cent of the overall market or 2/3rd of all laptops for Lenovo and Acer by 2030, which seems quite ambitious. Lastly, Dixon incrementally backward integrating each year to achieve PLI requirements could potentially be return dilutive over the short term and remains a key thing to watch out for. Retain Sell, with an unchanged FV of Rs 4,200," Kotak Institutional Equities said.
Chairman & Managing Director Atul B Lall said the manufacturing of Lenovo's IT Hardware products under the IT hardware PLI 2.0 scheme would give a strong impetus to India’s manufacturing competitiveness.
"Lenovo will bring in the global know-how and processes to manufacture IT hardware products. We are delighted and encouraged by the trust Lenovo has reposed on Dixon for the association and believe that this association will leverage our excellence, superior execution track record and it represents a major milestone in Indian Governments “Make in India” initiative."
Lall said he expects that the partnership would scale up localisation and creation of component ecosystem & employment opportunities in India.
Shares of Dixon Technologies (India) Ltd will be in focus today after the company post market hours of Monday said its wholly-owned subsidiary Padget Electronics Private Limited bagged a manufacturing contract by Lenovo to carry out manufacturing of IT Hardware products including notebooks and laptops under the production linked incentive (PLI) 2.0 scheme, subject to signing of definitive agreement in due course.
Dixon Tech is design-focused and solutions company engaged in manufacturing products in the consumer durables, lighting and mobile phones markets in India. It manufactures LED TVs, washing machines, mobile phones, CCTV & DVRs, medical equipment, wearables and lighting products such as LED bulbs and tubelights.
The stock closed at Rs 6,372.15 apiece on Monday, up 6.83 per cent. It is up 63.42 per cent year-to-date. That said, the scrip has an average target price of Rs 5,404, as per publicly available data with Trendlyne, which suggests a potential 15 per cent downside. ICICI Securities has a target of Rs 4,900 on the stock. Kotak Institutional Equities sees the fair value of the stock even lower at Rs 4,200.
"With Dixon planning to achieve Rs 48,000 crore in revenue from IT hardware over the next 6 years; this implies a share of nearly 17 per cent of the overall market or 2/3rd of all laptops for Lenovo and Acer by 2030, which seems quite ambitious. Lastly, Dixon incrementally backward integrating each year to achieve PLI requirements could potentially be return dilutive over the short term and remains a key thing to watch out for. Retain Sell, with an unchanged FV of Rs 4,200," Kotak Institutional Equities said.
Chairman & Managing Director Atul B Lall said the manufacturing of Lenovo's IT Hardware products under the IT hardware PLI 2.0 scheme would give a strong impetus to India’s manufacturing competitiveness.
"Lenovo will bring in the global know-how and processes to manufacture IT hardware products. We are delighted and encouraged by the trust Lenovo has reposed on Dixon for the association and believe that this association will leverage our excellence, superior execution track record and it represents a major milestone in Indian Governments “Make in India” initiative."
Lall said he expects that the partnership would scale up localisation and creation of component ecosystem & employment opportunities in India.