
Emkay has initiated a buy call on Dixon Technologies with a target price of ₹20,000/share, implying an upside potential of 22.70% from its current market price of ₹16,300. The brokerage highlighted several growth drivers and strategic advantages for the company.
Key highlights:
- Growth prospects:
- Dixon has successfully gained leadership across verticals and expanded into adjacent markets.
- The company is expected to dominate the rising smartphone assembly opportunity, capturing an incremental 70-75% market share, potentially increasing its overall share to ~44% by FY35E.
- Margin improvement and integration:
- Aggressive backward integration has led to significant margin improvements and opens up opportunities for third-party sales and exports.
- Additional opportunities:
- Potential growth from industrial PCBs and auto electronics, targeting a ₹4 trillion market by FY35E.
- Earnings outlook:
- Emkay projects a 20%/40% sales/EPS CAGR over FY25E-35E, with FY27 EPS estimates 17% above consensus.
Emkay believes Dixon’s robust prospects and leadership position justify its premium valuation, with an implied Dec-26 EV/EBITDA of ~41x.
Disclaimer: This article is for informational purposes only and does not constitute financial advice.