Dixon Technologies share price gains over 3%; JM Financial raises target price on the stock, sees 15% more upside
Dixon Technologies shares are up more than 65% year-to-date (YTD) and analysts expect more upside to it on the back of government’s thrust on lowering imports of IT hardware and the Dixon Technologies’ recent contract with Lenovo which is believed to give it a strong head start in IT manufacturing. Also Read: Which Tata Group stock performed the best in 2023? The answer may surprise you JM Financial has a ‘Buy’ rating on Dixon Technologies and raised the target price on the stock to ₹7,215 per share from ₹5,975 earlier.
The revised target price implies an upside of over 15% from Wednesday’s closing price. Dixon Technologies, through its wholly owned subsidiary Padget Electronics, has entered into a contract with Lenovo to manufacture IT hardware products (laptops, tablets).
Recently, Dixon had emerged a successful candidate for the IT hardware PLI scheme 2.0. Lenovo commands 19% market share in laptops in India and through this contract Dixon expects to cater to 10- 15% of Lenovo’s volume in FY25, JM Financial noted.
(Exciting news! Mint is now on WhatsApp Channels Subscribe today by clicking the link and stay updated with the latest financial insights! Click here!) Additionally, Dixon Technologies has guided for IT Hardware revenue of ₹18-20 billion and ₹40-45 billion for FY25 and FY26 respectively ( ₹1.6 billion in FY23), mainly driven by Lenovo. The company has also guided for cumulative revenue of ₹480 billion from this business over 6 years (starting FY25).
“Dixon’s track record of successfully scaling up its Mobile & EMS division (revenue of ₹46 billion in 1HFY24 vs ₹5.4 billion in FY20) provides confidence in its ability to scale up new businesses. Government’s thrust on localization of IT hardware manufacturing
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