Dixon Tech Q4 Results: Revenue up 2%, margin narrows but better than feared; Dividend declared

Electronic components manufacturer Dixon Technologies Ltd. reported results for the March quarter after market hours on Tuesday, May 12, which were better than expectations across parameters.

The company reported revenue of ₹10,510 crore during the quarter, better than the CNBC-TV18 poll projection of ₹10,239 crore, and 2% higher from the same quarter last year.

Earnings Before Interests, Tax, Depreciation and Amortisation (EBITDA) for the quarter stood at ₹408.4 crore, marginally higher than the CNBC-TV18 poll of ₹372 crore. EBITDA declined 7.8% from the year-ago period.

EBITDA margin narrowed by 40 basis points from last year to 3.9% from 4.3%. However, the contraction in margins was better than feared as the CNBC-TV18 poll had projected the figure at 3.6%.

Net profit for the period is not comparable due to the fair value gain in the base quarter. Brokerages had assumed a different post tax figure as adjusted net profit.

What To Expect From Dixon

The quarter is likely to be a soft one for Dixon, as softer smartphone volumes in the mobile and EMS segment could impact the company's topline.

Weakness in Xiaomi and Ismartu volumes could also hurt Dixon's mobile business this quarter. Higher memory prices, tight availability of DRAM is likely to have weighed on handset production, thereby limiting volume growth, despite incremental contributions from IT hardware, telecom and the components business.

Key Things To Watch

The recent sell-off in shares of Dixon have extended the stock's year-to-date losses to 15%. However, the stock is still managing to hold above its recent 52-week low of ₹9,600.