DIXON - Investment Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Investment Rating: 4.2

📊 Fundamental Analysis: Dixon Technologies (DIXON)

Dixon Technologies is a leading electronics manufacturing services (EMS) company in India, benefiting from the "Make in India" push and rising domestic demand for consumer electronics. Its fundamentals reflect strong growth, but the valuation is extremely rich.

Metric Value Implication

P/E Ratio 118 Highly overvalued vs. industry PE of 35.6

PEG Ratio 1.98 Acceptable — growth justifies premium valuation

ROCE / ROE 39.8% / 32.9% Exceptional — top-tier capital efficiency

Dividend Yield 0.03% Negligible — not suitable for income investors

Debt-to-Equity 0.22 Low — manageable leverage

EPS ₹197 Strong earnings base

Qtr Profit Var +68.3% Explosive growth momentum

FII/DII Holding Change -1.26% / +3.61% DII confidence rising; FII cautious due to valuation

📉 Technical Analysis

Current Price: ₹16,784

DMA 50 / DMA 200: ₹15,529 / ₹14,608 → Bullish trend continuation

RSI: 70.7 → Overbought zone; risk of short-term correction

MACD: +465 → Strong bullish momentum

Volume: Below average — waning interest near highs

💰 Ideal Entry Price Zone

₹14,800–₹15,500

This zone aligns with 50-DMA and offers a better risk-reward entry

Avoid fresh entry above ₹17,500 unless earnings growth continues to surprise

📈 Long-Term Investment Outlook

Strengths

Industry leader in EMS — strong tailwinds from domestic manufacturing

ROCE and ROE are among the best in the mid-cap space

PEG ratio below 2 — growth supports valuation

Consistent profit growth and rising DII interest

Risks

P/E > 100 — valuation is extremely stretched

RSI > 70 — short-term correction likely

Low dividend yield — not ideal for conservative investors

FII selling — valuation concerns or profit booking

Dixon is a high-growth, high-valuation play. Ideal for aggressive long-term investors who believe in India's manufacturing story. Entry should be timed during dips or consolidation phases.

🏁 Exit Strategy / Holding Period

If you already hold DIXON

Holding Period: 3–5 years to capture full benefit of EMS sector expansion

Exit Strategy

Consider partial profit booking near ₹18,500–₹19,000 (recent high)

Reassess if ROCE drops below 25% or PEG rises above 2.5

Hold if earnings growth sustains and valuation moderates over time

Would you like a comparison with other EMS players like Amber Enterprises or Syrma SGS to explore alternatives with better valuation comfort?

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