Shares of Dixon Technologies are expected to be in focus today. The stock last closed at ₹13,241.
In its latest note, Morgan Stanley maintained an underweight rating on Dixon with a target price of ₹11,563 per share, citing uncertainty around the company’s IT hardware growth prospects following the extension of IT hardware import norms.
Morgan Stanley believes that the extension of the Import Management System (IMS) could allow global brands such as Acer, Lenovo, HP, and Asus to continue importing products under requisite licences and disclosure requirements. This, the brokerage said, could limit the pace of localisation and create growth uncertainty for domestic electronics manufacturers.
The brokerage highlighted that over the past two years, Dixon has retained its cumulative IT hardware revenue guidance of ₹48,000 crore up to FY31. This implies an annual revenue run rate of ₹7,500–8,000 crore in the coming years, a level Morgan Stanley considers challenging under the current regulatory and competitive landscape.
Morgan Stanley further estimates that IT hardware could contribute around 7% of Dixon’s FY30 revenue. However, it cautioned that more favourable import norms for global brands may pose a downside risk to this estimate if imports remain elevated.
Disclaimer: This article is based on a brokerage report. The views expressed are those of the brokerage and do not represent the views of this publication. This is not investment advice.
