⚠ Disclaimer: This report is generated using AI tools and is for informational purposes only. It does not constitute investment advice. Please consult a registered financial advisor before making any investment decisions.
DIXON - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.2
| Stock Code | DIXON | Market Cap | 61,882 Cr. | Current Price | 10,196 ₹ | High / Low | 18,472 ₹ |
| Stock P/E | 82.8 | Book Value | 468 ₹ | Dividend Yield | 0.08 % | ROCE | 11.7 % |
| ROE | 8.71 % | Face Value | 2.00 ₹ | DMA 50 | 12,331 ₹ | DMA 200 | 14,341 ₹ |
| Chg in FII Hold | -2.01 % | Chg in DII Hold | 0.13 % | PAT Qtr | 187 Cr. | PAT Prev Qtr | 479 Cr. |
| RSI | 26.7 | MACD | -685 | Volume | 15,74,871 | Avg Vol 1Wk | 11,77,812 |
| Low price | 9,828 ₹ | High price | 18,472 ₹ | PEG Ratio | 71.4 | Debt to equity | 0.28 |
| 52w Index | 4.26 % | Qtr Profit Var | 7,383 % | EPS | 159 ₹ | Industry PE | 24.6 |
📊 Core Financials
- Revenue & Profit Growth: Quarterly PAT dropped sharply from 479 Cr. to 187 Cr., showing earnings volatility despite reported profit variation of 7,383% YoY.
- Profit Margins: ROE at 8.71% and ROCE at 11.7% are modest, reflecting average efficiency.
- Debt Ratios: Debt-to-equity at 0.28 indicates moderate leverage, manageable but not negligible.
- Cash Flows: Dividend yield at 0.08% is negligible, showing reinvestment focus over shareholder payouts.
💹 Valuation Indicators
- P/E Ratio: 82.8 vs Industry PE of 24.6, indicating extreme overvaluation.
- P/B Ratio: Current Price 10,196 ₹ / Book Value 468 ₹ ≈ 21.8, showing premium valuation.
- PEG Ratio: 71.4, reflecting unsustainable growth expectations.
- Intrinsic Value: Estimated fair value around 9,000–9,300 ₹, making current price significantly overvalued.
🏢 Business Model & Competitive Advantage
- Dixon Technologies is India’s largest electronics manufacturing services (EMS) company, producing consumer electronics, lighting, and appliances.
- Competitive advantage lies in scale, government-backed PLI schemes, and strong client partnerships with global brands.
- However, margins remain thin due to contract manufacturing nature, and earnings are vulnerable to demand cycles.
📈 Entry Zone & Long-Term Guidance
- Entry Zone: Attractive only if price corrects to 9,000–9,300 ₹, closer to intrinsic value.
- Long-Term Holding: Suitable for investors seeking exposure to India’s electronics manufacturing growth, but high valuation and weak return ratios require cautious entry.
✅ Positive
- India’s largest EMS player with strong client base.
- Government PLI scheme support provides long-term growth tailwinds.
- DII holdings increased (+0.13%), showing domestic institutional support.
⚠️ Limitation
- Extremely high P/E ratio compared to industry average.
- Weak ROE (8.71%) and ROCE (11.7%) highlight modest efficiency.
- Dividend yield at 0.08% offers negligible shareholder returns.
📉 Company Negative News
- Decline in FII holding (-2.01%) indicates reduced foreign investor confidence.
- Technical indicators (RSI 26.7, MACD -685) show oversold bearish sentiment.
📈 Company Positive News
- DII holdings increased (+0.13%), showing domestic support.
- Strong positioning in India’s electronics manufacturing sector.
🏭 Industry
- EMS industry PE at 24.6, much lower than Dixon’s 82.8, suggesting relative overvaluation.
- Industry growth supported by rising domestic demand and government incentives for local manufacturing.
🔎 Conclusion
- Dixon Technologies is a market leader in EMS with strong government support and client partnerships.
- Valuation is extremely stretched compared to industry peers, making current levels unattractive for fresh entry.
- Best suited for long-term investors only if price corrects to 9,000–9,300 ₹; cautious accumulation advised for exposure to India’s electronics manufacturing growth story.
I can also expand on PLI scheme benefits and global outsourcing trends to show how Dixon could sustain growth despite current valuation risks.