Dixon Technologies shares hit record high; here's what brokerages say
Multibagger stock: The stock of the electronic goods contract manufacturer opened higher at Rs 13,259.
- Sep 16, 2024,
- Updated Sep 16, 2024 4:28 PM IST
Shares of multibagger Dixon Technologies hit their record high on Monday amid a surge in the domestic market. Dixon Technologies stock rose 7.89% intraday to a record Rs 14,050 against the previous close of Rs 13,021.40 on BSE. The stock of the electronic goods contract manufacturer opened higher at Rs 13,259. Later the stock ended 7.37% higher at Rs 13,981 on BSE. Market cap of the consumer durables firm rose to Rs 83,661.43 crore. Total 0.43 lakh shares of the firm changed hands over the counter amounting to a turnover of Rs 58.90 crore on BSE.
In terms of technicals, the relative strength index (RSI) of Dixon Technologies stands at 58.3, signaling it's trading neither in the overbought nor in the oversold territory. Shares of Dixon Technologies are trading higher than the 10 day, 20 day, 30 day, 50 day, 100 day and 200 day moving averages.
Motilal Oswal has a price target of Rs 15,000 on the stock.
"We estimate a revenue/PAT CAGR of 44%/51% during FY24-27. We believe that an efficient working capital cycle, a focus on capital allocation, and higher asset turnover ratios should result in an RoE/ RoCE of 33%/36% by FY27E. We initiate coverage on the stock with a BUY rating and a DCF-based TP of Rs 15,000. Though valuations are on the higher side, strong industry growth drivers, presence in the fast-growing segments, possibility of adding more segments, and best-in-class RoIC will keep valuations higher," said Motilal Oswal.
Japanese brokerage firm Nomura has initiated coverage on the stock with a 'Buy' rating. It has fixed a target price of Rs 15,567 per share, citing benefits from localisation in mobiles and IT hardware.
Mentioning Dixon's significant business-to-consumer opportunities, the brokerage said that the company could capture over 30% of India's mobile industry by FY27, with additional growth expected from exports. The brokerage also mentioned Dixon's strong return on capital employed (ROCE) and its ability to maintain a premium valuation due to increasing backward integration.
On the other hand, in a report dated September 10, Kotak Institutional Equities assigned a sell rating to the stock with a fair value of Rs 7,330.
"The potential addition of one more large customer as well as entry into the server market still remain key. However, with IT PLI requiring incremental backward integration each year, Dixon’s foray into IT hardware could potentially be return-dilutive over the short term and remains the key thing to watch out for. We raise our FY2026-27 estimates by 3-4% and FV to Rs 7,330 as we roll forward to September 2026E," said Kotak.
Dixon Technologies (India) is the largest home-grown design-focused and solutions company engaged in contract manufacturing products in the consumer durables, lighting and mobile phones markets in India.
Shares of multibagger Dixon Technologies hit their record high on Monday amid a surge in the domestic market. Dixon Technologies stock rose 7.89% intraday to a record Rs 14,050 against the previous close of Rs 13,021.40 on BSE. The stock of the electronic goods contract manufacturer opened higher at Rs 13,259. Later the stock ended 7.37% higher at Rs 13,981 on BSE. Market cap of the consumer durables firm rose to Rs 83,661.43 crore. Total 0.43 lakh shares of the firm changed hands over the counter amounting to a turnover of Rs 58.90 crore on BSE.
In terms of technicals, the relative strength index (RSI) of Dixon Technologies stands at 58.3, signaling it's trading neither in the overbought nor in the oversold territory. Shares of Dixon Technologies are trading higher than the 10 day, 20 day, 30 day, 50 day, 100 day and 200 day moving averages.
Motilal Oswal has a price target of Rs 15,000 on the stock.
"We estimate a revenue/PAT CAGR of 44%/51% during FY24-27. We believe that an efficient working capital cycle, a focus on capital allocation, and higher asset turnover ratios should result in an RoE/ RoCE of 33%/36% by FY27E. We initiate coverage on the stock with a BUY rating and a DCF-based TP of Rs 15,000. Though valuations are on the higher side, strong industry growth drivers, presence in the fast-growing segments, possibility of adding more segments, and best-in-class RoIC will keep valuations higher," said Motilal Oswal.
Japanese brokerage firm Nomura has initiated coverage on the stock with a 'Buy' rating. It has fixed a target price of Rs 15,567 per share, citing benefits from localisation in mobiles and IT hardware.
Mentioning Dixon's significant business-to-consumer opportunities, the brokerage said that the company could capture over 30% of India's mobile industry by FY27, with additional growth expected from exports. The brokerage also mentioned Dixon's strong return on capital employed (ROCE) and its ability to maintain a premium valuation due to increasing backward integration.
On the other hand, in a report dated September 10, Kotak Institutional Equities assigned a sell rating to the stock with a fair value of Rs 7,330.
"The potential addition of one more large customer as well as entry into the server market still remain key. However, with IT PLI requiring incremental backward integration each year, Dixon’s foray into IT hardware could potentially be return-dilutive over the short term and remains the key thing to watch out for. We raise our FY2026-27 estimates by 3-4% and FV to Rs 7,330 as we roll forward to September 2026E," said Kotak.
Dixon Technologies (India) is the largest home-grown design-focused and solutions company engaged in contract manufacturing products in the consumer durables, lighting and mobile phones markets in India.