Dixon Technologies

Stock Opportunities
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Good results.
Operating margins continuously increasing due to increased scale.

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Dixon Technologies Q2FY21 result update

Revenue of the company grow by 17% y-o-y to Rs.1639 cr in Q2FY21. EBIDTA of the company has registered growth of 41% y-o-y to Rs.89 cr compared to Rs.63 cr in previous years the same quarter. The net profit of the company has posted growth of 22% y-o-y to Rs.52 cr.

Segment-wise
Revenue of Consumer Electronics Products segment has posted 30% y-o-y growth to Rs.957 cr and EBIT of this segment grows by 50% y-o-y to Rs.27 cr.

Revenue of The lighting Products segment has posted 4% y-o-y growth to Rs.296 cr and EBIT of this segment grew by 21% y-o-y to Rs.28 cr.

Revenue of Home Appliances segment has posted 4% y-o-y growth to Rs.145 cr and EBIT of this segment grows by 5% y-oy to Rs.17 cr.

Revenue of Mobile Phones segment has posted 2% y-o-y growth to Rs.197 cr, and EBIT of this segment grows by 294% yo-y to Rs.16 cr.

Revenue of the Security Systems segment has posted 9% y-o-y de growth to Rs.40 cr, and EBIT of this segment grew by 10% y-o-y to Rs.1.17 cr.

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Does anyone know why promoter and management have been selling shares in the open market since Sept 2020 after giving such strong guidance for the coming years?

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Following statements are copied from trendlyine
One stock that investors seem to be in love with at the moment is a contract manufacturer for mobile phones, consumer electronics and household appliances - Dixon Technologies. According to Trendlyne’s ‘Check Buy or Sell’ feature, Dixon Technologies’ stock is currently trading in the ‘Sell Zone’ and at a 12-month trailing PE multiple of 124.

PLI impact on Dixon

Ever since the union government unveiled its production-linked incentives (PLI) scheme to promote domestic mobile manufacturing, Dixon Technologies’ stock has been on an upward trajectory. The company got approved under the PLI scheme to make mobile phones and expects to post 40% growth in revenues in FY21 even under the cloud of the COVID19 pandemic.

Ever since Dixon Technologies was approved under the PLI scheme, its stock has been testing new highs, rising from lows of Rs 3,200 seen in March 2020 to come within touching distance of Rs 11,900. The stock has almost tripled its value and many insiders have made handsome gains.

In the past two weeks, Chairman Sunil Vachani and Geeta Vaswani of the promoter group have sold a total of 0.44% of their stake in the company amounting to Rs 51.4 crore. Vice President of Corporate Affairs Ashish Kumar sold shares worth Rs 89 lakhs in the past one month.

Oddly enough, despite such good prospects for the company, domestic mutual funds have been trimming their holdings…

Dixon Technologies MF Holdings

Mutual Fund Holdings in Dixon Technologies

…while foreign institutional investors have been buying more shares of the company.

Dixon Technologies FII Holdings

Foreign Institutional Investors’ Holdings in Dixon Technologies

In year-on-year terms, the company’s consolidated revenues grew 16.7% to Rs 1,639 crore, while net profits came in at Rs 52.4 crore (up 22% YoY). The recovery in the September quarter was mainly due to a strong order book.

The shutdown of manufacturing activities in the quarter ended June 2020 due to the lockdown had hit the company badly as April and May were a complete washout. Its consolidated revenues in the June quarter had more than halved to Rs 517 crore, while net profits plunged to Rs 1.6 crore (vs Rs 23.6 crore YoY).

The company expects that it will post a 40% growth in revenues in FY21 (compared to Rs 4,405 crore in FY20). It also estimates that it will earn nearly Rs 28,000-30,000 crore revenues over the next five years from the government’s PLI scheme. This is what is keeping the stock at stratospheric levels

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Would be interesting to see few quarters down the line if management is able to walk the talk

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Dixon eyeing new product segments including laptops, desktops, tablets and servers

Read more at:

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Dixon’s Wholly Owned Subsidiary- Padget Electronics to commence manufacturing of Smart Phones
for Motorola
• Padget Electronics Private Limited (“Padget”) has entered into an agreement with Motorola
Mobility LLC (“Motorola”) for Manufacturing of Smart Phones.
• The Manufacturing shall take place at Padget’s manufacturing facility situated at Naida.

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Q3 SHP analysis

  • Mutual Funds reduced 2.5%

  • Atul Lal (who falls under Director’s relative category) sold 0.48%

  • Kamla Vachani (who falls under Individual NRIs category) also sold 0.43%

  • FII increased 4.1%

  • Retail increased 0.44% (6458 new investors followed FIIs, which is jump of 12.56% in absolute nos)

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Explains the rally it has been witnessing, not sure how much is really justified but the future prospects do look good for Dixon, IMO.

Dis: Invested

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It is very very exciting to know that board is considering a split! Would make the shares even more liquid and allow new investors to hop on to Dixon!

Looking forward to buy it then!

Thanks and Regards
Nivas

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Can anyone tell me what is the revenue Dixon is expected in long term lets say for 5 year period?

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This news is a couple of weeks old though, real estate purchase by the owner.

Promoters could have several reasons to sell small parts, maybe a dream house is one!

Disc : Invested

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Dixon’s Wholly Owned Subsidiary - Padget Electronics To Commence Manufacturing Of Nokia Smartphones As HMD Global’s Manufacturing Partners

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Interesting article: 1) PLI for laptops/tablets is coming, maybe as soon as this month. Dixon has said previously they will target this business. 2) Gov is pushing Apple to build iPads in India with non-Chinese contract manufacturers.

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PLI for laptops/tablets and other IT products announced. Dixon is definitely applying for the lower threshold (20 cr investment & 4,900 cr revenue over 5 years) and is seriously evaluating going for the bigger scheme (500 cr investment and 50,000 cr revenue over 5 years).

Looks like Dixon is already siting it’s new factory for IT hardware

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Good read on Dixon

https://economictimes.indiatimes.com/industry/cons-products/electronics/electronics-manufacturers-revenue-and-stock-soared-in-2020-but-can-it-become-the-foxconn-of-india/articleshow/81367665.cms

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Can chip shortage affect Dixon Tech also?

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Im unsure how much chip shortage would impact Dixon, however, a few days ago, I was reading about Bosch and the article mentioned that ( and I quote) "Bosch said the “bottleneck” in the global semiconductor chip market had “not left Bosch unscathed.”

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