Dixon Tech Shares: Analysts see up to 55% value addition for smartphone biz after JV, deal

Global brokerage firm CLSA has maintained its 'high conviction outperform' rating on Dixon Technologies, with a price target of ₹19,000 per share, citing revving growth engines.

The brokerage wrote in its note that Dixon has taken significant steps to increase value addition in smartphones by venturing into camera module and enclosures.

The company has agreed to acquire a 51% stake in Q Tech India, which has a camera module manufacturing capacity of approximately 4 million units per month.

Additionally, Dixon has signed a 74:26 joint venture agreement with Chongqing Yuhai to manufacture enclosures.

CLSA estimates that these initiatives, along with the existing joint venture with HKC for display modules, could increase Dixon's value addition in smartphones to around 45-55%, up from the current 15-17%.

The brokerage added that this could boost margins by 150-200 basis points and open a new revenue stream via external sales.

JPMorgan has an 'Overweight' rating on the stock, with a price target of ₹17,700.

The brokerage said the acquisition and joint venture in components for backward integration should lead to earnings upgrades.

Assuming the transaction closes in Q2FY26, JPMorgan estimates it could add 2-3% to FY26 revenue/EPS and 3-4% to FY27 revenue/EPS.

It added that the move should also help expand margins, as the components business operates at double-digit margins with higher asset turns.

Nomura has also issue a 'Buy' rating on Dixon Tech, with a price target of ₹21,409 per share.

Nomura highlighted Dixon's foray into the camera module segment through Q Tech India, noting that the company is expanding its value-add further with both camera modules and precision components. This move could potentially increase EPS by 5%.

The company is entering the precision components segment through a 74% joint venture with Chongqing Yuhai.

Further, Nomura said that the acquisition of a 51% stake in an existing Indian entity will accelerate integration and avoid delays related to regulatory approvals.

Dixon Technologies (India) Ltd. has signed a binding term sheet to acquire a 51% stake in Kunshan Q Tech Microelectronics (India). The acquisition will be completed through a combination of primary and secondary investments, according to a regulatory filing.

The deal is expected to provide Dixon, a homegrown manufacturer of consumer durables and electronics, access to advanced technologies, high-precision manufacturing capabilities, and specialised talent.

While Q Tech India is primarily known for camera modules, it also offers services in IT support, cybersecurity, home automation, and web development.

Shares of Dixon Technologies (India) Ltd. ended 0.59% lower on Tuesday at ₹15,804. The stock has gained over 10% in the past month.

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