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This multibagger stock doubled shareholder money in one year! Anand Rathi sees more upside

This multibagger stock doubled shareholder money in one year! Anand Rathi sees more upside

This large-cap stock has gained 123 per cent in the last one year and has risen 86 per cent since the beginning of this year.

This multibagger stock doubled shareholder money in one year! Anand Rathi sees more upside This multibagger stock doubled shareholder money in one year! Anand Rathi sees more upside

Shares of Dixon Technologies Limited have doubled investors' money in the last 12 months. It has surged from the Rs 2305 mark to touch Rs 5145.80.
 
The large-cap stock has gained 123 per cent in the last one year and has risen 86 per cent since the beginning of this year.

With a market capitalisation of more than Rs 29,600 crore, the shares stand higher than 100 day and 200 day moving averages but lower than 5 day, 20 day and 50 day moving averages.

The company reported a 20 per cent year-on-year (YoY) rise in its net profit at Rs 62.64 crore for the quarter ended September 2021. Profit in the year-ago period stood at Rs 52.36 crore. Revenue from operations grew 71 per cent to Rs 2,803.78 crore in the September quarter compared to Rs 1,638.74 crore in the year-ago period.
 
Brokerage and research firm Anand Rathi said that Dixon Tech is targeting the global LED-bulb market. Its new product categories like refrigerators and telecoms equipment are well placed to support growth in FY23/FY24.
 
It noted that the JV with Bharti Enterprises has received approval under the PLI scheme (Dixon’s share is 51 per cent). This JV can generate Rs 1400 crore-1600 crore revenues next year. It can generate Rs 8000 crore-9000 crore revenue in the next five years.
 
"At the current market price, the stock trades at 66x/48x our FY23e/FY24e of Rs77/106, as we factor in 33/69 per cent CAGRs in revenue/PAT over FY22-FY24, resulting in the Return on Equity (RoE) expanding from 24 per cent in FY22 to 33 per cent in FY24. We upgrade the stock to a 'Buy' with a target price of Rs 5,936, based on FY24 earnings," it added.
 
According to MarketsMojo, the company has declared Positive results for the last 5 consecutive quarters and has a Strong Long Term Fundamental Strength. Also, the technical trend has improved from Mildly Bullish on September 27, 2021. The stock is technically in a Mildly Bullish range.
 
However, the stock is trading at a premium compared to its average historical valuations and it has a 'Very Expensive' valuation.
 
Recently, the company commenced the production of fully automatic washing machine for BSH Household Appliances Manufacturing Private Limited (“BSH”). It said products will be manufactured at Dixon’s state of the art manufacturing facility situated at Tirupati, India.
 
Commenting on this occasion, Mr. Atul B. Lall, Vice Chairman & Managing Director, Dixon said, “BSH is the largest manufacturer of home appliances in Europe and one of the globally leading companies in this sector with around 39 manufacturing facilities worldwide. Dixon always had this vision to commence manufacturing of Fully Automatic Washing Machine and we are glad to partner with BSH in this space."

 

Published on: Nov 29, 2021, 5:21 PM IST
Posted by: Tanya Aneja, Nov 29, 2021, 5:19 PM IST