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Informist, Saturday, Jul 20, 2024

By Narayana Krishna

HYDERABAD - Dixon Technologies (India) Ltd is likely to report a 75% year-on-year jump in both consolidated net profit and revenue for the June quarter, led by new client additions and ramp up in mobile phone handsets and component manufacturing. The company's net profit is seen at 1.2 bln rupees on a revenue of 57.3 bln rupees, according to an average of estimates of five brokerages.

Sequentially, the company's net profit is seen rising 26% and net sales growing by 23%. The company is yet to decide on the date for announcement of the earnings.

In Apr-Jun last year, Dixon Tech had reported a net profit of 688.2 mln rupees on a revenue of 32.7 bln rupees. The net profit for the Jan-Mar quarter was 951.7 mln rupees and revenue 46.6 bln rupees.

The net profit estimate of Anand Rathi Share and Stock Brokers is the lowest at 1.0 bln rupees and that of Nirmal Bang Equities the highest at 1.3 bln rupees. The revenue estimate of Anand Rathi is the lowest at 52.3 bln rupees and that of Nirmal Bang the highest at 61.5 bln rupees.

Dixon Tech's revenue growth in Apr-Jun would mainly be driven by manufacture of mobile phones as the company added new clients during last few quarters, analysts said.

"Dixon will continue to deliver high growth on the back of Mobile division while consumer electronics to remain flat this quarter. Price erosion in lighting division to persist. All in all, we anticipate 67% growth YoY led by new client additions in mobile division and execution ramp up," Nuvama Wealth Management said in a pre-earnings note.

Kotak Institutional Equities expects Dixon Tech to report 74% on-year growth in revenue on growth in mobiles and electronics manufacturing services segment.

Dixon Tech is a contract manufacturer which makes electronic consumer durables like lightings, televisions, surveillance cameras, wearables, refrigerators, LED panels and mobile phones for several brands.

"Growth would be driven by mobile phone volumes from the new customer that it had acquired in the preceding quarters and ramp-up from the existing customers. Refrigerator segment will also help in revenue growth. Margins are expected to remain at similar levels as benefit of operating leverage will be off-set by high growth in mobile phones which carries lower margins," YES Securities said.

Kotak Institutional Equites sees earnings before interest, tax, depreciation and amortisation or EBITDA margin for the quarter at 3.9%. The average of estimates of four brokerages for EBITDA is 2.3 bln rupees, with the estimates ranging from 2.0 bln rupees to 2.4 bln rupees.

The key things to watch for is the company's revenue outlook and plan to improve margins.

On Friday, shares of Dixon Technologies closed at 11,267.20 rupees on the National Stock Exchange, down 5.7% from the previous day's close.

Following are the Apr-Jun earnings estimates for Dixon Technologies based on reports compiled by Informist from five brokerage houses:

End

Edited by Ashish Shirke

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