Emkay Global has buy call on Dixon Technologies (India) with a target price of Rs 4500. The current market price of Dixon Technologies (India) Ltd. is Rs 4015.
Time period given by analyst is 12 months when Dixon Technologies (India) Ltd. price can reach defined target.
Dixon Technologies (India) Ltd., incorporated in the year 1993, is a Mid Cap company (having a market cap of Rs 23603.16 Crore) operating in Consumer Durables sector.
Financials
For the quarter ended 31-03-2021, the company reported a Consolidated Total Income of Rs 2110.69 Crore, down -3.31 % from last quarter Total Income of Rs 2182.92 Crore and up 146.18 % from last year same quarter Total Income of Rs 857.38 Crore. Company reported net profit after tax of Rs 44.26 Crore in latest quarter.
Investment Rationale
The brokerage has now incorporated revenues accruing from various PLI schemes (Telecom, Lighting and IT Hardware), as well as from LED monitor manufacturing and Refrigerator expansion. Increasing focus on exports in key segments augurs well for reducing the dependency on domestic revenues. Diversification, increasing scale and management’s focus on deploying global best practices in the organization in collaboration with renowned consultants should benefit in the long term. Continued capacity expansion in business segments indicates strong order book, which in turn provides strong revenue visibility. With the majority of revenues coming from MNC brands, Dixon has already showcased its capabilities on product quality and execution. However, with exports starting at a global scale for the first-time would require sharper execution focus as company has multiple business opportunities to execute at the same time. It has cut FY22 EBITDA by 7% due to ongoing covid related disruptions. Key risks: adverse currency and continued commodity price inflation; customer loss and execution challenges; and rise in competitive intensity in the contract manufacturing space
Promoter/FII Holdings
Promoters held 35 per cent stake in the company , FIIs held 20.6 per cent, DIIs 11.9 per cent and public and others 32.5 per cent.
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