Dixon Tech Receives ‘Outperform’ Rating with New Stock Target from Macquarie; Check the Details

Synoposis: Macquarie maintained its ‘Outperform’ rating on Dixon Technologies and raised its target price, expecting the Vivo joint venture and expanding EMS business to drive strong growth, with EPS potentially tripling by FY29.

The shares of this are an Electronic Manufacturing Services (EMS) company with operations in the electronic products vertical, such as consumer electronics, lighting, home appliances, CCTVs, and mobile phones, are in the spotlight after it rose by 3 per cent in today’s market session following the commentary and target given by Macquarie. 

With a market capitalisation of Rs. 83,562 cr, the shares of Dixon Technologies (India) Ltd closed at Rs. 13667 per share, increasing 3% in today’s market session, making a high of Rs. 13,733.25, up from its previous close of Rs. 13,368.15 per share. The stock has declined 13% over the past year, while gaining 13% year-to-date, 28% in the last six months, and 15% over the past month.

What’s the News

Macquarie has maintained its ‘Outperform’ rating on Dixon Technologies and raised its target price to Rs 16,000 from Rs 15,000, which is 20% upside from its previous closing levels, citing strong business momentum and improving growth visibility. The brokerage has increased its earnings estimates, driven by robust demand trends and the company’s expanding electronics manufacturing services (EMS) business.

A key growth driver is Dixon’s joint venture with Vivo, which Macquarie believes will significantly accelerate revenue growth and improve long-term earnings visibility. The brokerage expects this partnership to help triple Dixon’s earnings per share (EPS) by FY29, while forecasting 28% revenue CAGR and 43% EPS CAGR between FY26 and FY29.

Macquarie also highlighted several potential upside triggers that could further strengthen Dixon’s growth outlook. These include opportunities under the PLI 2.0 scheme, expansion in the industrial EMS segment, benefits from lower import duties, increasing traction in automotive electronics, and continued growth in the IT hardware business. Together, these factors are expected to support sustained earnings growth over the coming years.

Dixon-Vivo JV to Boost Smartphone Manufacturing Growth in India 

On July 9th, Dixon Technologies signed a joint venture agreement (JVA) with Vivo Mobile India Pvt. Ltd (VMI) to establish a new company in India for manufacturing electronic devices, including smartphones. The joint venture will be owned 51% by Dixon and 49% by Vivo, with Dixon holding the controlling stake. The venture has also received the Government of India’s approval under Press Note 3, allowing Vivo to invest in the new company.

The new joint venture will operate as an original equipment manufacturer (OEM) and will initially undertake a portion of Vivo’s smartphone manufacturing orders in India. It will also have the flexibility to manufacture electronic products for other brands in the future. 

According to Dixon, the partnership is expected to strengthen its position in India’s Android smartphone manufacturing ecosystem by leveraging its manufacturing expertise and execution capabilities. The transaction is expected to be completed within one year, subject to customary conditions and regulatory approvals, with both companies jointly overseeing the management and operations of the new venture.

Dixon Technologies (India) Ltd is one of India’s largest electronics manufacturing services (EMS) companies. It manufactures products such as smartphones, televisions, washing machines, LED lighting, wearables, IT hardware, and other electronic devices for leading global and domestic brands.

In conclusion, Macquarie’s optimistic outlook suggests that Dixon Technologies could be entering its next phase of growth. With strong execution, expanding manufacturing capabilities, and multiple business tailwinds, the brokerage believes the company has the potential to triple its EPS by FY29 while delivering sustained long-term value.

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