DIXON - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

Fundamental Rating: 4.0

📊 Core Financials

Earnings & Profitability: EPS of ₹92.2 is strong, but PAT dropped sharply from ₹65.7 Cr to ₹15.9 Cr, a 43.2% decline QoQ. ROCE at 11.7% and ROE at 8.71% are modest, suggesting room for margin improvement.

Debt Profile: Debt-to-equity of 0.14 — low leverage, which supports financial flexibility and scalability.

Cash Flow: Not explicitly stated, but historically strong operating cash flows driven by scale and asset-light model.

💰 Valuation Indicators

Metric Value Insight

P/E Ratio 782 Extremely overvalued vs. industry PE (26.4)

P/B Ratio ~50.6 Very high premium over book value

PEG Ratio 674 Indicates valuation far exceeds growth

Dividend Yield 0.04% Minimal income play — growth-focused

Valuation is highly stretched, and PEG ratio flags caution despite long-term growth potential.

🏭 Business Model & Competitive Advantage

Dixon Technologies is India’s leading electronics manufacturing services (EMS) company. Key strengths include

Contract manufacturing for top brands like Samsung, Xiaomi, and Philips

Diversified portfolio: LED TVs, mobile phones, lighting, appliances, CCTV

Beneficiary of India’s PLI (Production Linked Incentive) scheme

Strong execution capabilities and scalable infrastructure

The company expects FY25 revenue to hit ₹40,000 Cr, up from earlier guidance of ₹30,000–₹32,000 Cr

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. Mobile segment now contributes 82% of topline, and margins are expected to improve from 3.3% to 4.5% over the next 12–18 months

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📈 Technical & Sentiment Indicators

RSI: 72.3 – Overbought zone, suggesting short-term caution.

MACD: 440 – Strong bullish momentum.

Volume Surge – Well above weekly average, indicating high interest.

DMA 50 & 200: Price is above both, confirming medium-term strength.

Brokerages like Nomura maintain a “Buy” rating with a target of ₹18,564

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. Long-term targets range from ₹22,500 by end of 2025

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to ₹10,000+ by 2030

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💡 Investment Strategy

🔽 Entry Zone

Ideal Buy Range: ₹16,500–₹17,000, near DMA 50 and below current price.

Current Price ₹18,327: Above ideal entry — consider waiting for a dip or partial accumulation.

🕰️ Long-Term Holding

Hold or Accumulate on Corrections: Dixon’s leadership in EMS, low debt, and PLI tailwinds make it a strong long-term compounder.

Watch Valuation & Earnings Volatility: High P/E and recent PAT dip warrant disciplined entry and monitoring of margin trends.

Explore Dixon’s long-term share price targets

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and expert analysis on its growth outlook

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for deeper insights. Let me know if you'd like a peer comparison with Amber Enterprises or Syrma SGS.

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www.cnbctv18.com

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shareprice-target.com

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www.streetinvestment.in

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