Target: ₹14,200

CMP: ₹12,010.55

Our rating upgrade of Dixon Technologies is premised on rising smartphone ASPs compensating for sluggish volumes (up from average of ₹10,000 to ₹12,500-13,000, in our estimate).

Dixon is on track to achieve its about 33 million ex-Vivo smartphone volume guidance for FY27E; Vivo JV and PLI 2.0-led exports readying it for FY28E/29E (63-65 million/68-72 million) aspirations; approvals for the Vivo JV are expected soon and should start contributing by end-Q2FY27E (latest, H2FY27E), largely negating the need for sharp EPS downgrades hereon.

After several delays, IT hardware (Dixon’s clients ‒ HP, Lenovo, Acer, Asus) has been scaling up. The company reiterated its FY27E segmental revenue guidance of ₹5,000 crore with potential of ₹9,000-10,000 crore (FY28E) and over ₹14,000-15,000 crore (FY29E) and opportunities in servers and accessories, which it expects to capture through its JV with Inventec.

Backward integration plans on display and camera sub-assemblies are tracking well. Its display sub-assembly facility in JV with HKC is slated to commence production by Q4FY27; initial capacity of 24 million smartphone displays and a ramp-up to 55-60 million by FY29E.

In all, we up our FY27-29E EPS by 1-10 per cent, factoring in higher ASPs and non-smartphone ramp-ups, rolling over valuation to June 2028E (from March 2028E), and raising target multiple to 50x (from 45x), given improved visibility from Vivo JV. Hence, we upgrade Dixon to Buy (from Add) with a TP of ₹14,200 (from ₹11,200).

Published on June 25, 2026