Dixon Technologies stock gets another target price cut, more details

Shares of Dixon Technologies, which are under short-term correction, have received a target price cut from brokerage Investec. The brokerage has cut its target price to Rs 15,000 from Rs 18,900 while maintaining a buy call. The stock has lost 32% in three months and fallen 17.37% in a month. It's down 37% in a year.  

The brokerage has lowered FY26-28E EBITDA estimates by 5-14% primarily due to uncertainties related to delay in obtaining government approvals for Vivo & HKC JVs & slowdown in consumer demand (especially Mobiles) 

The stock trades at 40x FY28E EPS (vs 60x 3-4 months ago), which according to the brokerage more than reflects its concerns. 

The brokerage expects the firm to receive approvals for Vivo and HKC JVs in the next couple of months, which should provide revenue growth and margin comfort for FY27-28 estimates.  

However, Dixon would continue to increase value addition in Mobiles, IT Hardware and Telecom categories by integrating backwards, Investec said. 

In the current session, the Electronics Manufacturing Services (EMS) stock was trading 0.23% lower at Rs 11,002 on BSE. Market cap of the firm stood at Rs 66,632 crore. 

Earlier, brokerages such as HSBC and Nomura cut their price targets on the EMS stock. 

Brokerage HSBC pared its price target to Rs 15,500 from Rs 19,600 but maintained its buy call on the stock. HSBC said a surge in memory prices, delayed JV approvals, mobile PLI expiry concerns etc weigh on near-term performance of the firm. 

Nomura cut its target price to Rs 16,598 on Dixon stock while maintaining its buy stance. The Japanese brokerage cited slower near-term growth and earnings cuts. It also lowered its valuation multiple. 

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.