Dixon Technologies shares in a downtrend: Price targets, triggers behind the crash, outlook and more 

Dixon Technologies shares have taken a hit due to a global supply shortage in memory chips, risk to volumes and margins from FY27 due to pending government approvals and subdued Q3 earnings expectations. The Electronics Manufacturing Services (EMS) stock fell to a 52 week low of Rs 11,053.40 in the previous session. Market cap of the firm declined to Rs 67,366 crore. Later, the stock ended 1.20% lower at Rs 11100.80 against the previous close of Rs 11,235.75 on BSE. The stock has lost 33% in three months.  

Meanwhile, according to brokerage firm Phillip Capital, the primary reason behind Dixon stock's recent underperformance is due to a sharp decline in volumes from Motorola, a critical client for the company.

Motorola accounted for over 45% of Dixon's total FY25 revenue. 

Motorola's volumes fell 20% year-on-year in Q3, due to rising competition from Apple. Motorola's strategic decision to increase outsourcing to Karbonn has also affected sentiment around the Dixon Tech stock. Karbonn received 23% of Motorola's volumes during the quarter.

This dual impact not only resulted in Dixon losing volumes due to Motorola's overall decline but also faceing falling allocation as the client diversified its manufacturing partnerships. Phillip Capital noted that this development aligns with their thesis that mobile phone assembly offers little competitive moat.

The brokerage has a bearish stance on Dixon Technologies with a price target of Rs 9,085, a 19% downside from current levels. 

Ambit Capital has also revised its outlook on the stock cutting its price target to Rs 11,275 from Rs 11,868 while maintaining a "sell" rating on the stock.

However, brokerage HSBC has maintained its buy call on the stock but pared its price target to Rs 15,500 from Rs 19,600. HSBC said a surge in memory chip prices, delayed JV approvals, mobile PLI expiry concerns etc weigh on near-term performance of the firm. The third quarter seems to print subdued numbers with the absence of any major event, said HSBC while paring its FY26-28 estimates by 3-5% and target PE multiple to 50x. 

JP Morgan too pared Dixon Tech's price target by 30% to Rs 13,700 from Rs 19,600 earlier. 

Earlier, Nomura cut its target price to Rs 16,598 on Dixon stock while maintaining its buy stance. 

Nomura cited slower near-term growth and earnings cuts. It has also lowered its valuation multiple. Nomura said Dixon currently trades at a lower valuation multiple compared to its historical range, which it considers attractive given the long-term growth outlook, even though approvals remain a key trigger.

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.