Shares of Dixon Technologies (India) Ltd saw a robust 5% surge following the announcement that its wholly-owned subsidiary, Padget Electronics Private Limited, secured a significant manufacturing contract from Lenovo. The contract encompasses the production of IT hardware, including notebooks and laptops, as part of the production linked incentive (PLI) 2.0 scheme. The official agreement is pending and anticipated in due course.
As of 9:44 am the shares were trading 5.14% higher at ₹6,700.00
The ambitious goal set by Dixon aims for a staggering revenue of Rs 48,000 crore from IT hardware within the next six years. This objective translates to a substantial 17% share of the overall market or a significant two-thirds of all laptops for Lenovo and Acer by 2030. Analysts at Kotak Institutional Equities express skepticism about this ambitious target, citing potential return dilution in the short term due to Dixon’s incremental backward integration to meet PLI requirements. They maintain a “Sell” recommendation, with a constant fair value (FV) of Rs 4,200.
Atul B Lall, Chairman & Managing Director, highlighted that the manufacturing partnership with Lenovo under the IT hardware PLI 2.0 scheme is poised to significantly enhance India’s manufacturing competitiveness. The announcement reflects Dixon’s strategic focus on expanding its presence in the dynamic IT hardware sector, aligning with the broader goals of the PLI initiative.
