Dixon Tech: Nirmal Bang ups target, values stock at 15% discount to 5-year average

Nirmal Bang Institutional Equities on Wednesday reiterated its ‘Buy’ rating on Dixon Technologies Ltd and raised the stock’s target price to Rs 20,798, valuing it at 63 times estimated September 2027 earnings per share, a 15 per cent discount to its five-year average. The brokerage cited strong revenue growth, margin expansion, and strategic initiatives across business verticals as key reasons for its bullish stance.

Nirmal Bang remained positive on Dixon Tech, pointing to recent wins such as contracts covering nearly 30 per cent of India’s IT hardware market, increasing wallet share with existing clients, and backward integration through JVs and acquisitions. The brokerage said Dixon’s strong positioning as a leader in the EMS space underpins its long-term growth story, supporting the higher valuation and target price.

Dixon Tech reported consolidated revenues of Rs 38,800 crore in FY25, up 119 per cent year-on-year, driven by robust customer demand, scalable operations, and manufacturing excellence. Operating profit margins rose to 3.9 per cent on the back of sharp execution and disciplined cost management.

The brokerage highlighted Dixon’s entry into components manufacturing as a key growth lever, unlocking new opportunities and supporting long-term margin expansion. In mobiles, the company is benefiting from a healthy order book, new client additions, and rising export potential. Strategic moves such as a joint venture with Vivo and the acquisition of Ismartu are expected to further strengthen its growth trajectory.

In consumer electronics, Dixon has been expanding its ODM capabilities and onboarding marquee global brands. Partnerships with players like Amazon and LG are helping integrate advanced technology into its product portfolio. The company has also achieved meaningful market share in refrigerators, capturing 8 per cent of the overall Indian market and a commanding 48 per cent share of the OEM addressable market in the DC category within just one year.

In home appliances, Dixon is moving beyond ODM solutions by developing in-house tooling capabilities. It has already begun work on front-load washing machines and robotic vacuum cleaners, while also exploring new adjacent categories.