Dixon Technologies (DIXON IN): Upgrade to Buy: Top line and margin concerns recede

Research evidence excerpt

Dixon Technologies (DIXON IN): Upgrade to Buy: Top line and margin concerns recede

16 July 2026

Dixon Technologies EquitiesElectronic Equipment &

Instruments (DIXON IN)

Upgrade to Buy: Top line and margin concerns recede India

◆ Government of India announced INR625bn Mobile Phone

UPGRADE TO BUY

Manufacturing Scheme as old Mobile PLI scheme expired

◆ Concerns of margin erosion and customer retention have TARGET PRICE (INR) PREVIOUS TARGET (INR)

now receded; we increase mobile phones margin by 30bp 16000.00 12000.00

◆ Upgrade to Buy (from Hold) as we increase margins, target SHARE PRICE (INR) UPSIDE/DOWNSIDE

PE multiple to 48x, and TP to INR16,000 (from INR12,000) 13651.00 +17.2%

(as of 15 Jul 2026)

Better than expected Government support: The government of India today MARKET DATA

announced a Mobile Phone Manufacturing Scheme (MPMS), outlining INR625bn Market cap (INRm) 834,651 Free float 66%

Market cap (USDm) 8,676 BBG DIXON IN

incentive support on eligible sales for the manufacturing of mobile phones in India. 3m ADTV (USDm) 89 RIC DIXO.BO

This in our view hugely benefits Dixon, alleviating our concerns on margin erosion

and customers retention. Under the old production linked incentive (PLI) scheme FINANCIALS AND RATIOS (INR)

Year to 03/2026a 03/2027e 03/2028e 03/2029e

(which ended in March 2026), Dixon used to pass on the “lion’s share” of incentives HSBC EPS 138.36 202.36 305.70 371.14

(c3.3-3.4% out of c4% it received) to customers and kept c0.5%-0.6%, boosting its HSBC EPS (prev) 138.36 183.30 273.68 335.08

Change (%) 0.0 10.4 11.7 10.8

mobile phones margins. We had therefore reduced our margins estimates for FY27 Consensus EPS 154.02 174.74 267.20 324.54

compared to FY26 on the back of this and had assumed margin expansion from PE (x) 98.7 67.5 44.7 36.8