Dixon Tech Shares Gain 3% Amid Soft Q4 Earnings, Vivo Partnership Hopes

Dixon Technologies Shares Rise on Vivo JV Progress Despite Weak Q4 Earnings

Shares of Dixon Technologies traded higher on Wednesday, despite a 36.03% year-on-year decline in consolidated net profit to Rs 256.41 crore for the March quarter, as investors focused on progress in the company's proposed joint venture with Chinese smartphone maker Vivo.

On the National Stock Exchange (NSE), Dixon Technologies was trading at Rs 10,491.00, up Rs 353.00 or 3.48%. The company's Managing Director and CEO, Atul Lall, highlighted the scale of the opportunity presented by the proposed joint venture during the Q4 earnings call. He noted that the company had already made significant progress with the government and was close to securing necessary approvals.

According to Lall, the proposed joint venture with Vivo has the potential to add another 20-22 million units to the company's annual exports over time, building on the 35 million units sold last year. The mobile and electronics manufacturing services (EMS) business, which contributes nearly 90% of total revenue, reported a 4% year-on-year increase in revenue to Rs 9,485 crore.

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Motilal Oswal Financial Services, however, struck a cautious tone on the stock, citing challenges in the mobile handset industry, including rising memory prices, the expiry of PLI incentives, and potential delays in Vivo JV approval. The brokerage cut its revenue and earnings per share estimates for FY27 and FY28, respectively, and downgraded its rating from Add to REDUCE, with a lower target price of INR 10,560/share.