Dixon Technologies shares downgraded, price target slashed by CLSA after Q2 results

Shares of Dixon Technologies (India) Ltd. will be in focus on Monday, October 20, after the company received a rating downgrade and a price target cut from global brokerage firm CLSA.

CLSA has downgraded Dixon Technologies to 'Outperform' from its earlier 'Buy' rating and reduced its price target to ₹18,800 per share. Despite the cut, the revised target still implies a potential upside of around 13% from the stock's last closing price on Friday.

According to CLSA, Dixon's first-quarter revenue growth of 16% quarter-on-quarter largely addressed investor concerns around market share losses. The brokerage expects smartphone volumes to grow over 40% in FY27, after which growth would depend on a pickup in exports.

However, CLSA cautioned that the discontinuation of the Production Linked Incentive (PLI) scheme could pressure margins in early FY27, before the benefits of backward integration begin to flow through.

The brokerage added that growth visibility will depend on Dixon's ability to expand into new categories such as IT hardware, telecom equipment, and exports, alongside steady progress in margin expansion initiatives.

Meanwhile, Nomura has maintained a 'Buy' rating on Dixon Technologies with a price target of ₹21,152 per share. The brokerage said the company's mobile business remains on track, while its diversification into components, B2B manufacturing, and exports should help sustain healthy earnings momentum.

Nomura added that Dixon's efforts to broaden its customer base and tap new growth avenues keep long-term growth visibility high.

However, it trimmed its FY26F/27F/28F revenue estimates by 5%/2%/2%, while maintaining its EBITDA margin projections, which are expected to improve from 3.8% in FY26F to 4.3% and 4.8% in FY27/28F, respectively.

Nuvama Institutional Equities, on the other hand, has a 'Hold' rating on the stock with a price target of ₹16,600. It said the company's medium- to long-term growth outlook remains intact, with management targeting ₹1 lakh crore in annual revenue over the next three to four years, led by 4-4.5% EBITDA margins.

For the second quarter, Dixon Technologies reported an in-line performance across revenue, margins, and profit after tax (PAT).

Mobile volumes grew 13% quarter-on-quarter, slightly below its 15% guidance, while mobile and EMS segments registered a robust 41% year-on-year growth. However, consumer electronics and home appliances segments remained weak, impacted by deferred demand following GST rate cuts.

The company's reported PAT was boosted by fair-value gains on its stake in Aditya Infotech.

On Friday, ahead of the results announcement, Dixon Technologies shares closed 1.09% lower at ₹16,660 on the NSE.

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