Dixon Technologies shares hit 52-week high on partnership with Xiaomi to manufacture smartphones
Dixon Technologies surged 2% to hit a new 52-week high at Rs 5,379.8 in Thursday's trade on BSE after its wholly owned subsidiary- Padget Electronics Private Limited entered into an agreement with Xiaomi to carry out manufacturing of smartphones and other related products for Xiaomi.
The manufacturing will take place at Padget’s manufacturing facility in Noida.
Analysts say the deal will help Xiaomi India leverage Dixon’s status of being cleared to receive sops under the government’s production-linked incentive (PLI) scheme for mobile manufacturing.
And for Dixon, it will mean another big-ticket contract, assuring revenue for its mobile manufacturing business, which contributed the largest — 46% — to its total revenue of FY4Q.
Under the PLI scheme, Dixon has so far received around Rs 110 crore as incentives for meeting the incremental production targets.
The company currently makes phones for Reliance Jio, Motorola, and Nokia. Out of them, Motorola phones are exported from India.
«We are delighted and encouraged by the trust they have reposed on Dixon for the association and believe that this association will leverage our excellence, superior execution track record and Xiaomi’s expertise & leadership in Indian business ecosystem and it represents a major milestone in Indian Governments “Make in India” initiative,» said Atul B.
Lall, Vice Chairman & Managing Director, Dixon Technologies (India) Limited.
At 10.11 a.m., the scrip was trading 0.2% higher at Rs 5,295 on BSE. On a year-to-date basis, the stock surged 8%, while it has risen 17% in the past one year.
As per Trendlyne data, the average target price of the stock is Rs 4,557, which indicates a downside of 14% from the current market prices.
