UBS has upgraded Dixon Technologies to buy and raised its target price to ₹23,000, citing strong visibility into the company’s next growth phase as it expands into backward integration of non-semiconductor smartphone components. The brokerage expects Dixon to benefit from entry into key areas such as displays, camera modules, enclosures, and batteries, which should support both growth and margin expansion.
According to UBS, this expansion could drive a 110 basis points improvement in EBITDA margin by FY28 compared with consensus estimates of only a 40 basis points increase, even as the mobile production-linked incentive (PLI) scheme phases out by FY26. The firm projects Dixon’s revenue to reach US$11 billion by FY28, more than 2.5 times its FY25 levels.
Beyond FY28, Dixon is expected to have strong growth levers through component expansion beyond captive use, growing exports, entry into new verticals such as networking and servers, and potential inorganic growth opportunities. UBS emphasised that scaling up is unlikely to dilute returns since the expected margin gains should offset lower asset turns.
Disclaimer: The views and recommendations made in this article are those of UBS. This article does not constitute investment advice. Investors should consult their financial advisors before making any investment decisions.
