Buy Dixon Technologies (India), target price Rs 4285: Chandan Taparia

Chandan Taparia of Motilal Oswal Securities has buy call on Dixon Technologies (India) with a target price of Rs 4285. The current market price of Dixon Technologies (India) is Rs 3720.65. Time period given by analyst is Intra Day when Dixon Technologies (India) Ltd. price can reach defined target.

Dixon Technologies (India) Ltd., incorporated in the year 1993, is a Mid Cap company (having a market cap of Rs 21955.92 Crore) operating in Consumer Durables sector.

Dixon Technologies (India) Ltd. key Products/Revenue Segments include Domestic Appliances, Job Work, Rent, Service Charges, Export Incentives for the year ending 31-Mar-2021.


Financials
For the quarter ended 30-06-2022, the company reported a Consolidated Total Income of Rs 2855.49 Crore, down -3.35 % from last quarter Total Income of Rs 2954.57 Crore and up 52.89 % from last year same quarter Total Income of Rs 1867.67 Crore. Company reported net profit after tax of Rs 45.51 Crore in latest quarter.

Investment Rationale
Dixon has a healthy order book across key segments and a significant contribution is expected under the different PLI schemes in the medium to long term. We remain positive on future growth prospects given (i) the strong order book visibility across segments in the medium term, (ii) Addition of new clients, and (iii) Significant contribution from PLI revenues going forward. Key downside risks are a) delay in and b) slower ramp up in capacities. It remains positive over the long term. It values Dixon at 50x FY24 E EPS of Rs 85.7 arriving at the target price of Rs 4,285. (Vs. Rs 4,450 earlier).

Promoter/FII Holdings
Promoters held 34.3 per cent stake in the company as of 30-Jun-2022, while FIIs owned 15.08 per cent, DIIs 8.07 per cent.