Dixon Technologies shares tank 11% in 5 sessions; should you buy the dip?

Brokerage firms, both domestic and overseas, have a divided view on Dixon Technologies, which has dropped nearly 11 per cent in the last five trading sessions. Some analysts see the stock rising nearly 20 per cent, while others see another 8 per cent correction in the stock.

Shares of Dixon Technologies have tumbled nearly 11 per cent from Rs 18,350 to Rs 16,350 on Wednesday, with its market capitalization slipping below Rs 1 lakh crore. However, it remained range-bound, largely positive for the day. The stock has dropped nearly 15 per cent from its 52-week high at Rs 19,149.80, hit in December 2024.

“Noida based Dixon Tech, a leading manufacturing partner of major electronics brands has forayed into the manufacturing of lithium-ion batteries, battery packs by establishing a wholly owned Subsidiary named Dixon Electrocorp in a step towards backward integration and cost efficiency,” said the company in an exchange filing.

Dixon is said to foray in camera display modules. For PCB manufacturing, we estimate 18-20 month construction and 1 times asset turns with 15 per cent OPM upon scale-up, said Jefferies.It has incorporated a subsidiary to produce Li-ion batteries, Li-ion battery cells, Li-ion cells for digital applications, battery modules, related products components, it noted.

Jefferies has valued Dixon Tech at Rs 15,400 apiece, with a ‘hold’ rating, suggesting target PE is at a 10 per cent premium to historical trading avg multiple since listing. The overseas brokerage firm has cited new customer ads, category forays and higher ODM mix as upside risks; and Loss of market share or any key customer as downside risks.

“The stock down 10 per cent in the last three trading sessions vs Nifty down 1 per cent - don’t see any fundamental reason behind this fall,” said JP Morgan in its recent report on Dixon Tech. “We would recommend investors buy this dip for a high quality earnings compounder over next three years,” it said with an ‘overweight’ rating and a target price of Rs 19,500 on the stock.

While growth will be driven by mobiles over FY25-27E, post that believe growth can be supported by non-mobile as it scales up refrigerators, washing machines, IT hardware, telecom and lighting, JP added. “Catalysts for stock over next six months are government approval on JV with HKC; and updates if any on potential renewal of PLI scheme for mobiles that is ending in March 2026.”

Among the domestic brokerage firms, Motilal Oswal Financial Services has a ‘buy’ rating on Dixon Tech with a target price of Rs 22,300, while JM Financial has a ‘hold’ rating on the stock with a target price of Rs 18,000. Elara has suggested to ‘accumulate’ the stock with a target price of Rs 17,000.