Investec bullish on Dixon Tech: Maintains ‘Buy’, sees 23% upside, highlights value accretive capex plans

Investec has reiterated its Buy rating on Dixon Technologies, setting a target price of ₹19,000, reflecting a potential upside of 23% from its current market price of ₹15,430.00.

Key Takeaways:

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  1. Attractive Opportunity Amid Correction:
    Investec views the recent market correction as a favorable opportunity for investors to enter Dixon Tech.
  2. Display Fab Capex Plan:
    While investors remain cautious about the $3 billion capex plan for the display fab initiative, Investec highlights its potential to be significantly value accretive. The business is projected to yield an EBITDA of ₹2,000 crore starting FY31E.
  3. Logical Progression for Dixon:
    The brokerage believes the initiative aligns well with Dixon’s growth trajectory and long-term strategic vision.
  4. Compelling Economics:
    The project’s economics look promising, with 70-75% of the investment subsidized by the government, reducing financial risks for the company.

Outlook:

Investec underscores that Dixon’s focus on innovation and its ability to capitalize on new opportunities position it for sustainable long-term growth. The current valuations provide an attractive entry point for investors.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. Please consult your financial advisor before making investment decisions.