Dixon Tech shares drop 3%, take losing run to 5th day; here's why
Dixon Tech: CLSA in a note said smartphone volumes are at risk, as rising memory costs could inflate average selling prices by 10- 25 per cent, disproportionately impacting the lower-end consumer segment.
- Feb 23, 2026,
- Updated Feb 23, 2026 11:42 AM IST
Dixon Technologies (India) Ltd fell 3 per cent in Friday's trade, extending its losing streak to the fifth straight session. The stock has been under pressure amid concerns that volumes are at risk due to a surge in memory prices, with DDR5 and DDR4 contract rates rising 119 per cent and 63 per cent, month-on-month, in January, and NAND contract prices jumping 37-67 per cent in the same month. While a hike in memory prices is not expected to impact Dixon's margins, weak demand could impact its volumes, CLSA said in a recent note.
On Monday, the stock fell 2.99 per cent to hit a low of Rs 1,0730 on BSE. With this, the scrip is down 9 per cent in five sessions. CLSA in a note on February 19 said smartphone volumes are at risk, as rising memory costs could inflate average selling prices (ASPs) by 10- 25 per cent, disproportionately impacting the lower-end consumer segment.
Given risks to low-end smartphone volumes and concerns around medium-term growth visibility, the foreign brokerage last week downgraded Dixon Tech to 'Hold' from 'Outperform', with a lower target price of Rs 12,100 against Rs 15,880 earlier.
JPMorgan, meanwhile, in a note on February 20 cited reports suggesting easing restrictions on buying Chinese equipment. This could have a positive read through for Chinese JV approvals.
If Vivo JV approval comes through by March 2026, JPMorgan assumed it can contribute 1.2 crore to mobile volumes in FY27 and 1.5 crore in FY28. This could drive a 19-20 per cent upgrade to its revenue estimates for Dixon Tech over F Y27-28E but a lower 10 per cent EPS upgrade due to the 51:49 JV format that drives minority interest. In such a scenario, the fair value of Dixon would be Rs 16,300, it said.
JPMorgan said HKC JV approval also comes through, it sees Ebitda rising Rs 300 crore in FY27 and Rs 700 crore in FY28 as this will largely be for captıve consumption and hence would not add to revenues. That said, import substitution would drive tailwinds to Ebitda, it said.
"This could lead to a 13-23 per cent increase in Ebitda over FY27/28 but a lower 10-20 per cent increase in EPS due to the 76:24 JV format that drives minority interest. The DCF derived PE multiple goes to 54 times vs 50 times in the base case, taking fair value to Rs17,600 (57% potential upside)," JPMorgan said.
Dixon Technologies (India) Ltd fell 3 per cent in Friday's trade, extending its losing streak to the fifth straight session. The stock has been under pressure amid concerns that volumes are at risk due to a surge in memory prices, with DDR5 and DDR4 contract rates rising 119 per cent and 63 per cent, month-on-month, in January, and NAND contract prices jumping 37-67 per cent in the same month. While a hike in memory prices is not expected to impact Dixon's margins, weak demand could impact its volumes, CLSA said in a recent note.
On Monday, the stock fell 2.99 per cent to hit a low of Rs 1,0730 on BSE. With this, the scrip is down 9 per cent in five sessions. CLSA in a note on February 19 said smartphone volumes are at risk, as rising memory costs could inflate average selling prices (ASPs) by 10- 25 per cent, disproportionately impacting the lower-end consumer segment.
Given risks to low-end smartphone volumes and concerns around medium-term growth visibility, the foreign brokerage last week downgraded Dixon Tech to 'Hold' from 'Outperform', with a lower target price of Rs 12,100 against Rs 15,880 earlier.
JPMorgan, meanwhile, in a note on February 20 cited reports suggesting easing restrictions on buying Chinese equipment. This could have a positive read through for Chinese JV approvals.
If Vivo JV approval comes through by March 2026, JPMorgan assumed it can contribute 1.2 crore to mobile volumes in FY27 and 1.5 crore in FY28. This could drive a 19-20 per cent upgrade to its revenue estimates for Dixon Tech over F Y27-28E but a lower 10 per cent EPS upgrade due to the 51:49 JV format that drives minority interest. In such a scenario, the fair value of Dixon would be Rs 16,300, it said.
JPMorgan said HKC JV approval also comes through, it sees Ebitda rising Rs 300 crore in FY27 and Rs 700 crore in FY28 as this will largely be for captıve consumption and hence would not add to revenues. That said, import substitution would drive tailwinds to Ebitda, it said.
"This could lead to a 13-23 per cent increase in Ebitda over FY27/28 but a lower 10-20 per cent increase in EPS due to the 76:24 JV format that drives minority interest. The DCF derived PE multiple goes to 54 times vs 50 times in the base case, taking fair value to Rs17,600 (57% potential upside)," JPMorgan said.