Dixon Technologies’ share price slumped 14% to an intra-day low of Rs 15,120. The stock has fallen 26.6% from its recent high of Rs 19,148.90. Here is the reason why the share price of Dixon Technologies is falling today:
Dixon Technologies Q3 performance
Sequentially, the company’s net profit dropped by 47.5% standing at Rs 216.23 crore for Q3 FY25, as against Rs 411.70. The company’s revenue from operations fell 9.4% quarter-on-quarter to Rs 10,453.68 crore. However, the company posted a stellar year-on-year performance with net profit jumping 123% from Rs 97.09 in Q3 FY24.
Jefferies maintains ‘Underperform’ rating
The brokerage firm, Jefferies, has maintained its ‘Underperform’ rating on the stock with a target price of Rs 12,600. It believes that the company’s risk-reward remains stretched at a P/Eof 106x for FY26. Jefferies sees that the company trades at a very high valuation. It is a non-branded B2B electronics manufacturing service, which trades higher than branded B2C companies.
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Nuvama cuts FY25-27 estimates
Nuvama Institutional Equities cut the estimates for FY25 by 3% and 7% for FY27. The brokerage firm said it revised the estimates due to consolidation in Ismartu, Vivo joint venture, and muted demand in consumer appliances. It has maintained its ‘Hold’ rating on the stock, with a target price of Rs 18,790.
Motilal Oswal on Dixon Technologies
The brokerage house, Motilal Oswal Financial Servicesslashed the earnings estimated by 8% for FY25 and 4% for FY26. The brokerage believes the incremental margin from the display facility to offset the contraction in margins, which will occur because of the PLI scheme ending by FY26. The company is also looking into the possibility of entering the display fabrication market and is waiting for government regulations related to the anticipated component PLI scheme. However, Motilal Oswal has upgraded the FY27 earnings estimates by 7% to factor in higher mobile segment revenues and lower consumer electronics revenues. Also, it raised the target price to Rs 20,500 and maintained the ‘Buy’ rating.
JM Financial Services on Dixon Technologies
Dixon Technologies’ next phase of growth is anticipated to result from its significant emphasis on backward integration, which it initially expects to drive from its foray into display, camera, and battery module assembly and, thereon, by setting up a display fab. These initiatives are likely to drive value addition and give it incremental control over the supply chain, remoulding the company into a heavily backward integrated electronics manufacturer. However, the execution of these remains extremely crucial. The brokerage has maintained a ‘Buy’ rating on the stock with a target price of Rs 19,000.
Dixon Technologies Vs Nifty 50
Dixon Technologies’ share price has fallen more than 6.5% in the last five trading sessions. It has fallen 15.7% in the past one month. However, the share price of Dixon Technologies has risen almost 34% in the previous six months. The stock has given a multi-bagger return of 159% in the past one year.
To compare, the benchmark index, Nifty 50 has fallen 0.8% in the past five days. It has dropped by more than 3% in the last one month and 6% in the previous six months. However, it has given a return of 8.3% in the past one year.
