On Monday, 7th July, shares of Dixon Technologies (India) Ltd gained 1.50% to trade at ₹15,430 on the NSE, up ₹228 from the previous close of ₹15,202. The stock moved higher after B&K Securities initiated coverage with a ‘buy’ rating and a target price of ₹18,946 per share, implying a significant upside potential.
The brokerage noted that the target implies a price-to-earnings ratio of about 62x FY27E earnings. It expects the company’s continued scale-up in mobile and IT hardware, entry into new segments such as industrial electronics and electric vehicles, higher customer wallet share, and increased exports to drive strong growth.
B&K estimates Dixon’s revenue and profit after tax (PAT) to grow at a CAGR of 42% and 69%, respectively, over FY25–27E. It added that with efficient capital allocation, high asset turnover, and a focus on working capital, Dixon is likely to maintain a healthy return on capital employed (RoCE) of around 30% by FY27E.
The target price was arrived at using a discounted cash flow (DCF) model, assuming a weighted average cost of capital (WACC) of about 13% and a terminal growth rate of 5.5%.
The brokerage did highlight some risks, including low original design manufacturing (ODM) penetration in high-volume segments like mobile phones, organisational complexity as the company scales, execution risks around component integration, and geopolitical challenges in export markets.
B&K also observed that Dixon is uniquely positioned to benefit from the growing shift towards domestic and global electronics outsourcing, supported by favourable policy initiatives and a large total addressable market (TAM).
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