More Stories

Informist, Wednesday, Oct. 23, 2024

By Ayushman Mishra

MUMBAI – Electronics manufacturing services company Dixon Technologies (India) Ltd.'s Jul-Sept net profit is expected to double on the back of increased sales in the mobile segment. The company is also expected to benefit from partnerships with new clients such as Realme and Ismartu India Pvt. Ltd. which would aid top line growth. Dixon Tech manufactures electronic goods and devices for its customers which are consumer durable companies.

Dixon Tech's consolidated net profit will likely double on year to INR 2.16 billion, as per the average of estimates from nine brokerages. The company's consolidated revenue is also expected to almost double to INR 94.42 billion from INR 49.43 billion in the year-ago quarter. Sequentially, the company's top line is expected to rise 43.5% and the bottom line is expected to rise 61.4%.

Of the nine brokerage estimates, Nirmal Bang Equities has the highest estimate for net profit at INR 2.65 billion, while Anand Rathi Share and Stock Brokers Ltd. has the lowest estimate of INR 1.68 billion. The highest estimate for consolidated net sales is INR 107 billion from Nirmal Bang and the lowest estimate is INR 85.56 billion, from Anand Rathi.

The rise in mobile phone volumes has been instrumental for the top line growth of the company, analysts said. The revenue growth would be driven by a sharp ramp-up in mobile volumes and the company's integration with Ismartu, Motilal Oswal Financial Services said. The growth would be driven by an increase in mobile phone volumes from the new customers that the company had acquired in the preceding quarters and increased demand from existing customers, YES Securities said, and added that the refrigerator segment will also boost top line growth for the company in the latest quarter.

Although Elara Capital expects softer growth for consumer electronics companies due to a muted Onam festival, Nuvama expects Dixon Tech's consumer electronics segment to see steady growth in the latest quarter, with 80-85% capacity utilisation for refrigerators. Order books for electronic manufacturing services companies such as Dixon Tech are seen rising on year on the back of healthy customer additions across segments, Motilal Oswal said. The brokerage, however, expects the order books to remain flat sequentially.

Dixon Tech's earnings before interest, taxes, depreciation and amortisation for the September quarter is seen at INR 3.72 billion, according to the average of estimates from seven brokerages. The EBITDA margin is seen below 4%, Nuvama said. This shows the skew towards the mobile business, which is high volume and lower margin in nature. The benefit of operating leverage will be offset by high growth in mobile phones, which is a lower margin business, YES Securities said. Investors should watch for incremental client additions, ramp-up in consumer electronics sales, and margin guidance, Motilal Oswal said.

Dixon Tech is scheduled to announce its results Thursday. On Wednesday, shares of the company ended at INR 15,284.45 on the National Stock Exchange, up 2.5% from the previous close.

Following are the Jul-Sept earnings estimates of Dixon Technologies based on reports compiled by Informist from nine brokerages:

End

Edited by Ashish Shirke

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

Informist Media Tel +91 (22) 6985-4000 

Send comments to feedback@informistmedia.com

© Informist Media Pvt. Ltd. 2024. All rights reserved.