Dixon Technologies India (DIXON IN) (Buy) - Striving for growth across multiple fronts

Research evidence excerpt

Dixon Technologies India (DIXON IN) (Buy) - Striving for growth across multiple fronts

ramp-up.

• Our view: Given the delay in Vivo approval and subdued demand outlook, we cut FY27F/28F

Source: LSEG, Nomura mobile volumes to 45mn/55mn (from 55mn/63mn). This includes exports, and Vivo units of

12mn/17mn. Strong ramp-up potential of IT Hardware/Telecom and higher mobile ASPs lead us

to largely retain our revenue estimates. On margins, given delayed ramp-up of component Research Analysts

manufacturing, which will largely contribute from FY28F, we lower FY27F/28F margins by India Consumer Durables

53bp/35bp to 3.3%/4.2%, leading to 15%/5% EBITDA cuts and 21%/8% EPS cuts. A key risk Siddhartha Bera, CFA - NFASL

remains Vivo JV approval, which can impact FY28F EPS by ~20% if it does not come through. siddhartha.bera@nomura.com

+91 22 403 74362

Maintain Buy; lower TP to INR13,813, based on 45x FY28F EPS

Kapil Singh - NFASL

• Given strong ramp-up potential in IT Hardware/Telecom/Industrial EMS, and backward integration kapil.singh@nomura.com

driving margins, Dixon has potential to deliver 20%+ EPS growth even beyond FY28F, in our view. +91 22 403 74199

Hence, its current valuation at 34x FY28F EPS looks attractive. We maintain our target P/E at 45x Tisha Mandavia - NFASL

(near the low end of 40-60x historical trading band), and roll forward to Jun-27F to derive our new TP tisha.mandavia@nomura.com

of INR13,813 (INR14,678 previously). We maintain our Buy rating. +91 22 403 74034

Year-end 31 Mar FY25 FY26F FY27F FY28F

Currency (INR) Actual Old New Old New Old New

Revenue (mn) 388,601 494,639 488,728 764,684 749,807 910,209 930,348

Reported net profit (mn) 10,955 13,823 14,386 13,748 10,837 20,171 18,419

Normalised net profit (mn) 7,355 13,823 9,454 13,748 10,837 20,171 18,419