Nomura has maintained its buy rating on Dixon Technologies, even as it cut the target price to ₹16,589 per share, citing near-term headwinds from a sharp spike in global memory prices that could impact mobile device volumes.
The brokerage noted that rising memory costs are likely to weigh on smartphone affordability and demand in the short term, prompting it to lower mobile volume estimates for Dixon to 39 million units in FY26, 57 million in FY27, and 66 million in FY28, compared with earlier expectations of 47 million, 64 million, and 73 million units, respectively.
As a result, Nomura has revised revenue estimates downward by 12% for FY26, 2% for FY27, and 1% for FY28, although it highlighted that higher average selling prices (ASPs) should partially offset the impact of lower volumes. The brokerage emphasised that Dixon’s diversified product mix and increasing value addition continue to support its medium-term growth trajectory.
Despite the near-term adjustments, Nomura believes Dixon’s long-term structural story remains intact, driven by electronics manufacturing localisation, rising outsourcing by global brands, and India’s push to strengthen domestic supply chains. At around 32x FY28F earnings, the stock’s valuation is viewed as attractive relative to its growth prospects.
Nomura reiterated that while memory price volatility could create short-term uncertainty, Dixon remains well positioned to benefit from sustained growth in electronics manufacturing over the coming years.
Disclaimer: The views and recommendations above are those of Nomura. Business Upturn does not endorse them. Please consult a financial advisor before making investment decisions.
