CLSA has downgraded Dixon Technologies to Hold from Outperform, cutting the target price to ₹12,100 from ₹15,800, citing risks emerging from the global memory cycle.
According to CLSA, the memory industry is entering a super cycle, driven by AI’s growing appetite for high-bandwidth memory (HBM) and DDR5. At the same time, mainstream storage segments are witnessing tightening supply and rising costs, as manufacturers prioritise higher-margin AI-grade memory products.
India’s heavy dependence on imports leaves it exposed to this global supply squeeze. CLSA highlighted that memory prices have already surged sharply, with DDR5 and DDR4 contract rates up 119% and 63% month-on-month in January, while NAND contract prices rose 37–67%.
The brokerage believes rising memory costs could inflate smartphone average selling prices by 10–25%, posing a risk to volumes, particularly in the lower-end consumer segment. Given concerns around low-end smartphone demand and medium-term growth visibility, CLSA has taken a more cautious stance on the stock.
Disclaimer: The views expressed above are those of CLSA and do not represent the views of Business Upturn. This article is for informational purposes only and does not constitute investment advice.