Dixon Tech Q3 Results: Revenue growth below expectations, other income aids profit

Dixon Technologies Ltd. reported December quarter results after market hours on Thursday, January 29, which were in-line to below expectations on some parameters.

Revenue for the quarter grew by 2.1% from last year to ₹10,671 crore. A CNBC-TV18 poll had expected Dixon's revenue to grow by 3% from last year to ₹10,783 crore. Weaker than expected mobile sales during the quarter dragged Dixon's topline this quarter.

Revenue for Dixon's mobile business dropped by 27% from the previous quarter, even as it grew 5% on a year-on-year basis. The division contributed to 92% of the overall topline.

The company's Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA), stood at ₹414.6 crore, in-line with the CNBC-TV18 poll of ₹411 crore. On a year-on-year basis, Dixon's EBITDA grew by 5.8%.

EBITDA margins stood at 3.9% from 3.75% last year. Margins were projected to be at 3.8%.

Net profit for the period grew by 67% year-on-year to ₹287 crore from ₹171 crore. However, most of this profitability jump is due a sharp rise in other income, which stood at ₹131 crore from ₹6.5 crore last year. Adjusted for the other income, the profitability would be lower than last year's figure.

Higher memory prices have increased costs for low-end phones, thereby impacting demand.

For the first nine months of the year, Dixon's topline has grown by 34% on a year-on-year basis. According to PhillipCapital, Dixon's full-year growth guidance of 40% to 45% looks increasingly difficult, and a guidance cut from the company is imminent.

Shares of Dixon Technologies had ended little changed on Thursday ahead of the earnings announcement at ₹10,280. The stock is down 16% in January so far, having delivered negative returns between 9% to as high as 31% in the January month of the previous three years. Earlier in the week, the stock had slipped below the mark of ₹10,000 for the first time since June 2024.