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Informist, Tuesday, Jul. 22, 2025

By Shakshi Jain and Anand JC

NEW DELHI – Dixon Technologies (India) Ltd., which has signed a binding term sheet to acquire 51% stake in Kunshan Q Tech Microelectronics (India) Pvt. Ltd., aims to ramp up the latter's camera module manufacturing capacity to meet its in-house demand. "Last year, they did around 40-odd million camera modules. Dixon in-house consumption itself of camera modules is going to be almost in the next two years reaching 180-190 million. So we want to ramp it up to that level," the company's management said in a post-earnings conference call with analysts.

Dixon Technologies hopes to also improve Kunshan Q Tech Microelectronics (India)'s profitability to up to 9.0-9.5%, from 6.5-7.0% at present, in the next two years. "We plan to invest to further deepen the manufacturing and also there is going to be a PLI (production-linked incentive scheme) coming into this business... We feel confident that the 7.5% margin can potentially go to 9.5% over the next couple of years," the management said.

Agreements pertaining to the deal with Kunshan Q Tech Microelectronics (India) are expected to be closed within the next two months and the financials of the target company are expected to be consolidated with those of Dixon Technologies from the December quarter, the company said. "We feel that over the next 4-5 years, this business is going to be somewhere around 5,000 crores (INR 50 billion)," the company management added.

Dixon Technologies plans to file applications next week for its camera modules, display modules, and precision components under the production-linked incentive scheme for component manufacture.

Dixon Technologies also shared details on expected timelines related to its joint venture deals with other Chinese players. The company said construction of the display unit with HKC is going on and it aims to carry out trial runs in the fourth quarter of the current financial year. Revenue from the facility should start flowing in from the first quarter of the financial year 2026-27 (Apr-Mar), it said.

"Finally, the aspiration is that we should be able to do 4 million units of mobile displays, 1.5-1.8 million units of notebook displays, and we feel that we should be able to do almost 2.0-2.5 million units of the automotive displays," the company's management said, without offering a timeline for these targets.

On other joint venture deals, the Dixon Technologies management said: "The Inventec JV, we target to start in Q4 of the current fiscal or Q1 of the next fiscal. For the new JV of Chongqing Yuhai, the plan is still being done. It will take some time. As far as the Vivo JV is concerned, we are waiting for the PN3 (Press Note 3) approval and then we will conclude it."

The proposed joint venture between Vivo India and Dixon Technologies to manufacture smart phones and other electronic devices in the country is subject to regulatory approvals, including those under Press Note 3, which are mandatory for investments from countries sharing land borders with India.

MOBILE SEGMENT

For its mobile business, which contributes the majority share to the company's overall revenue, Dixon Technologies expects a sequential rise of at least 15% in volume ahead of the festival season. With a healthy order book in place, the company expects to clock a smart phone volume of 11-12 million units in the current quarter. In Apr-Jun, its smart phone volume was 9.6 million units while its feature phone volume stood at around 5.7 million units.

Dixon Technologies said it is confident of achieving its annual target of 42-43 million smart phones for FY26. Further, with the company's attempt at backward integration of camera display modules, Dixon Technologies is confident it can "more than compensate" for the lack of benefits under the production-linked incentive scheme, which is scheduled to end in FY26.

"One is our deepened relationship with the customer and our large scale we generate when operating like this," the management said. "Second, the nature of our relationship with the customer is bound through JV. We negotiate related systems... the third is our foray into backward integration of camera modules (and) displays. Now, these give us a significant advantage and a competitive edge."

NON-MOBILE SEGMENTS

The management further said, "We continue to make strategic investments to expand our manufacturing capacities, enhance our manufacturing capabilities, and focus on deepening the company ecosystem, which will help us build a resilient and future-ready business."

Dixon Technologies expects a revenue of nearly INR 50.00 billion from its telecom business in a year or so. Meanwhile, its refrigerator category is expected to hit the INR 25.00-billion mark within three years. In the consumer electronics category, the company believes it "had a significant miss on the television business". However, the company is hopeful of a rebound in the current quarter, riding on a healthy order book.

Earlier in the day, Dixon Technologies reported its earnings for the June quarter. The company posted a 68% on-year rise in consolidated net profit for the quarter to INR 2.25 billion, largely in line with analysts' estimate of INR 2.22 billion. On quarter, the bottom line declined almost 44% due to a high base effect. Its consolidated revenue rose 95% on year and nearly 25% on quarter to INR 128.36 billion. This was higher than the INR 120.56 billion expected by analysts.

Tuesday, shares of the company closed over 1% lower at INR 16,112 on the National Stock Exchange. The company disclosed its June quarter earnings after market hours.  End

Edited by Rajeev Pai

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