Shares of Dixon Technology have generated strong returns for their investors over the past 3 years, rising over 1000% in this period. stock went up all around ₹420 to in October 2018 ₹Currently 4,993, rising by 1088% in this period. In comparison, the benchmark Sensex has gained a little over 70% in the last three years.
an investment of ₹Dixon Tech would have had 1 lakh in October 2018 ₹11,88,000 at present.
Its market cap is currently high ₹29,000 crores and it has reached a 52-week high ₹6,240 on BSE as on October 19, 2021. It hit its 52-week low ₹1,805 as on October 30, 2020.
Established in 1993, Dixon Technologies is an electronics manufacturing services company, based in Noida. It is a contract manufacturer of televisions, LED bulbs, smartphones, washing machines and CCTV security systems for companies including Philips, Samsung, Panasonic and Xiaomi.
financial situation
In the September quarter, the firm reported a growth of 19.63% in its consolidated net profit ₹62.64 Cr Vs ₹52.36 crore in the year-ago quarter. Meanwhile, its sales soared 71 percent ₹2803.78 crore as compared to Rs.2803.78 crore in the quarter under review ₹1638.74 crore during the same quarter last year.
The 5-year CAGR growth of the firm in revenue is 26.7% while the 5-year CAGR growth in profit is over 35%.
Although the valuations of the firm remain high, according to experts, the firm’s fundamentals remain strong.
For FY20-21, the firm reported 46% YoY growth in revenue and 33 percent YoY growth in its PAT.
share holding
As per the September quarter shareholding data, the promoters hold 34.9% stake in the firm, while the remaining 65% is held by the public.
Mutual funds hold 8% in the firm while FIIs hold a little over 18%. Among the individual shareholders, ICICI Prudential Life Insurance holds 1.3% stake in the firm while LIC holds 3.7%.
comrades
The stock has also outperformed its peers. In the last one year itself, this stock has gained about 170 percent. Among peers, Bajaj Electricals has gained around 130%, TTK Prestige has gained 92%, Honeywell Auto has gained around 50% and Whirlpool has gained 4% over the period.
going forward
Going forward, the firm is likely to benefit heavily from the Government’s Production Linked Incentive (PLI) scheme. It has already signed an agreement with laptop maker Acer to manufacture laptops for the domestic market as well as for exports. There are also plans to acquire a manufacturing unit under the Bharti Group to manufacture telecom equipment under the PLI scheme.
Dixon Technologies Executive Officer said, “Dixon has received PLI license for telecom sector. We are proposing to do a joint venture with Bharti Group. The first manufacturing plant that we will acquire will be Bharti’s plant in Ludhiana. who manufactured telephones. Chairman Sunil Vachani said.
The Department of Telecommunications (DoT) has shortlisted only 31 companies, including Dixon Technologies, under the production linked incentive scheme.
A big push to government schemes like Make in India, PLI will prove to be very profitable for the firm. However, according to experts the valuation of the firm is quite high, so it is advisable to wait for the fall before committing. However, investors who already own the stock should not sell now.
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