Sharekhan's research report on Dixon Technologies
In our interaction with Dixon, management highlighted near-term headwinds in terms of lower volume offtake post the festive season in TVs and mobiles. Further, COVID-lockdowns in China may disrupt the supply chain although for a brief period. The company is confident of strong long-term growth given new customer additions in key product categories, improving performance of lighting and consumer electronics businesses and margin expansion. Ramp-up of high margin original design manufacturer (ODM) products, liquidation of high-cost inventory, cost optimisation and a fall in input prices, would improve profitability.
Outlook
A healthy balance sheet, low working capital and strong revenue/PAT CAGR of ~31%/~47% over FY22-25E justify its rich valuation. Recent correction is a good buying opportunity for long-term investors. We retain a Buy on Dixon Technologies (Dixon) with an unchanged PT of Rs. 4,960.
For all recommendations report, click here
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.