Dixon Tech shares surge after analysts cite re-rating triggers, attractive valuations

Shares of Dixon Technologies (India) Ltd. opened lower on Friday, January 30, after the company reported largely in-line quarterly results. The stock, however, recovered early losses and is now trading 3% higher.

Revenue and margins came in line with expectations, while PAT surged above forecasts due to a one-off item.

Mobile revenue grew 5% YoY, defying expectations of a decline, despite weaker volumes. Overall, margins expanded across segments by 10-130bps YoY.

Concall highlights

Management expects approval for Vivo PN3 soon and anticipates ECMS approval for camera and display modules shortly.

Q3FY26 performance vs poll estimates (YoY)

Revenue rose 2% to ₹10,672cr (poll: ₹10,783cr)
EBITDA increased 6% to ₹414cr (poll: ₹411cr)
EBITDA margin expanded 20bps to 3.9% (poll: 3.8%)
PAT surged 68% to ₹287cr (poll: ₹150cr)

What brokerages are saying

JPMorgan maintains an 'Overweight' rating with a price target of ₹13,700.

The brokerage said that Dixon cut its FY26 mobile volume guidance to 34-35mn units (from 40-42mn) and withdrew FY27 guidance (from 55-65mn), citing memory price inflation and delays in Vivo JV approvals.

JPMorgan said the move provides flexibility and optionality if Vivo approvals come through.

Nomura retains a 'Buy' rating with a target of ₹14,678, citing growth recovery and new customer ramp-ups.

It expects Dixon to deliver a 51% EPS CAGR over FY26-28F, with pending government approvals acting as key catalysts.

The stock, trading at 32 times its FY28F earnings per estimates, looks attractive given the outlook.

CLSA also recommends 'Buy' with a target of ₹15,880.

It said that Q3 revenue fell 28% QoQ in line with estimates, with smartphone sales impacted by elevated memory prices. CLSA expects this pressure to continue in lower- and mid-tier segments in Q4.

The brokerage pointed to margin-accretive backward-integration initiatives and said near-term catalysts include Vivo PN3 approval, clarity on PLI extension, and progress in other segments.