Dixon Technologies shares: Nuvama downgrades to 'Hold'; brokerages revise target prices after Vivo JV

Nuvama Institutional Equities downgraded Dixon Technologies (India) Ltd shares to 'Hold' from 'Buy', while raising its target price to Rs 13,000 from Rs 11,700, following the approval for its joint venture with Vivo Mobile India (VMI).

The brokerage said VMI has received government approval for the investment, enabling the recently executed joint venture (JV) to manufacture electronic devices, including smartphones, as an original equipment manufacturer (OEM).

Nuvama has now factored in seven months of contribution from the Vivo JV, six months earlier than previously assumed, and updated its volume and margin estimates for the mobile segment, including Vivo. As a result, it has increased its FY27 and FY28 EPS estimates by 4 per cent each.

However, the brokerage downgraded the stock to 'Hold' as it believes the recent rally over the past month has made valuations fair. It noted that Dixon is currently trading at 86 times FY27E EPS and 61 times FY28E EPS.

Other brokerages also raised their target prices after incorporating the Vivo JV into their estimates.

HDFC Securities maintained its 'Reduce' rating and revised its target price upward to Rs 11,780 from Rs 11,390 earlier, based on a discounted cash flow (DCF) valuation using a 12 per cent WACC and 5 per cent terminal growth, implying around 46 times September 2028 estimated EPS.

Elara Capital retained its 'Accumulate' rating and increased its target price to Rs 14,550 from Rs 12,375, valuing the stock at 55 times March FY28E earnings to reflect incremental profits from the Vivo JV.

Motilal Oswal Financial Services Ltd (MOFSL) reiterated its 'Buy' rating and revised its DCF-based target price to Rs 16,100, rolling forward its valuation to September 2028. "Our TP (target price) also factors in Dixon's 6.5 per cent stake in Aditya Infotech," it added.

Meanwhile, shares of Dixon Technologies were last seen trading 0.65 per cent higher at Rs 13,508.45 in Monday's trade. At this level, the stock has gained 12.98 per cent over the last one month.