Dixon Technologies shares likely to rise another 25%, here's why

Dixon Technologies shares are set to rise 25% from the current level, according to brokerage B&K Securities. The brokerage has initiated coverage on Dixon Technologies with a ‘Buy’ rating and a price target of Rs 18,946. Dixon is seen as a key beneficiary of India’s electronics manufacturing push and the accelerating global shift towards outsourcing, says the brokerage. 

B&K said Dixon Technologies “stands at the forefront of India’s electronics manufacturing transformation”. 

The brokerage expects the firm to drive 42% revenue and 69% PAT CAGR over FY25-27E. It cites continued scale-up in mobile and IT hardware, entry into industrial EMS and EV, wallet share gains, backward integration, export growth, and rising ODM share behind its positive projections. 

The firm is expected to maintain healthy 30% post-tax return on capital employed by FY27E. 

The brokerage said high growth, large TAM, policy tailwinds, and high return ratios should sustain valuations for the  electronics manufacturing services (EMS) firm. 

Dixon Technologies stock rose 1.39% to Rs 15,410 on BSE today. Market cap of the firm rose to Rs 93,199 crore. 

The multibagger stock has gained 45% from its 52 week low of Rs 10,613 reached on July 23, 2024. It has risen 263% in two years and gained 315% in three years. 

Turnover rose to Rs 41.84 crore as 0.27 lakh shares of the firm changed hands on BSE. 

The relative strength index (RSI) of Dixon Technologies stands at 57.1, signaling it's trading in the neither in the overbought nor in the oversold territory.

Shares of Dixon Technologies are trading higher than the 5 day, 10 day, 20 day, 30 day, 50 day, 100 day, 150 day and 200 day moving averages.

In Q4 of the last fiscal, Dixon Technologies clocked a 322% year-on-year rise in profit to Rs 401 crore led by an one-time exceptional gain of Rs 250.4 crore. Revenue climbed 121% year-on-year to Rs 10,292.5 crore against Rs 4,658 crore in the previous year.

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.