Nomura has reiterated its ‘Buy’ rating on Dixon Technologies, setting a bullish target price of ₹21,409, following the company’s back-to-back announcements aimed at boosting component manufacturing in smartphones.
In its latest strategic update, Dixon said it would acquire a 51% stake in Q Tech India, a company that manufactures camera modules — one of the key components in smartphones. In addition, the company also announced its entry into precision components by forming a 74:26 joint venture with Chongqing Yuhai, a move that would enable it to manufacture high-grade smartphone enclosures locally.
According to Nomura, these two steps are expected to significantly expand Dixon’s value addition in smartphone manufacturing, potentially improving earnings per share (EPS) by up to 5% over the medium term. “The decision to acquire a controlling stake in an existing Indian entity will also help Dixon avoid the typical time delays that come with regulatory approvals and greenfield setups,” the brokerage noted.
Dixon has been rapidly expanding its portfolio of value-added manufacturing capabilities, from LED TVs and washing machines to now critical smartphone components. These new business lines are also expected to align well with India’s broader goal of becoming a global electronics manufacturing hub, further supported by favourable policy and incentive frameworks.
Nomura remains optimistic about the company’s execution strength and ability to scale new verticals rapidly, noting that Dixon is among the very few Indian contract manufacturers actively venturing into backward integration and component ecosystems.
The brokerage said the company’s proactive strategy not only strengthens client stickiness but also opens up avenues to tap new revenue streams by becoming a supplier of components to third-party OEMs.
