Dixon Technologies (India) Share Price Today Delivers Multibagger Returns, Up 320% in 18 Months; More Gains Ahead? | Stock Market News

EMS (Electronics Manufacturing Services) stocks have been performing exceptionally well, reaching record highs and delivering great returns to shareholders. Dixon Technologies (India) is a standout in this sector, with its stock price increasing by over 320% in just 18 months, rising from ₹2,681 to ₹11,267.

Growth of the Indian EMS Industry

Over the past five years, the Indian EMS industry has gained significant importance. The COVID-19 pandemic accelerated its growth due to several factors:

• Increased demand for essential medical devices.
• Rise of the work-from-home economy, leading to higher demand for smartphones, tablets, and laptops.
• A greater focus on sustainability, increasing the need for digital solutions to track environmental initiatives.

India as a Hub for High-Quality Design

India has become a hub for high-quality design work. Many multinational companies have set up and expanded their centers in the country. EMS providers now offer comprehensive design services along with contract and original equipment manufacturing.

Market Potential

According to Equirus Securities, the total addressable market for EMS in India’s electronics sector is expected to grow at a 35% CAGR, reaching approximately ₹4.5 trillion by FY26E. Dixon is the only company that caters to most segments of this market.

About 63% of India’s EMS market is made up of mobile phones (both smartphones and feature phones), with Dixon being a major player in this area. Mobile phone assembly contributed 62% of Dixon’s FY24 revenues. The remaining 38% of revenues came from consumer electronics, including lighting, LED TVs, inverter boards for ACs, wearables, hearables, refrigerators, set-top boxes, and telecom and IT hardware.

Strategic Growth and Financial Stability

Dixon excels by entering and scaling new categories while maintaining a streamlined business model with 2-3 days of net working capital (NWC). The company reinvests its cash flow to expand or enter new categories. For example, it generated a cash flow from operations (CFO) of ₹15 billion over the past three years while investing ₹15 billion in capital expenditure.

Dixon’s growth is also driven by acquiring new customers and expanding its order book for FY24. This includes mobile phones from Samsung and Xiaomi, IT hardware from Acer and Lenovo, and telecom products from Jio and Airtel.

Future Prospects

The brokerage believes that Dixon is well-positioned to benefit from the global shift in electronics manufacturing. The company has significant opportunities in mobile phone production and IT hardware assembly. Its strong presence in high-value, low-margin (HVLM) segments such as telecom, home appliances, and consumer electronics solidifies its position in India’s EMS sector.

Financial Forecast

The brokerage forecasts a consolidated revenue, EBITDA, and PAT CAGR of approximately 39%, 38%, and 45%, respectively, for FY24–FY27. EBITDA margins are expected to stabilize at 3.9% until FY27. The mobile phone segment, known for its lean working capital model, is anticipated to become a major revenue driver, pushing the company’s return on capital employed (RoCE) above 40%.

Dixon benefits from a debt-free balance sheet and strong operating cash flow (OCF), with average pre-tax OCF/EBITDA ratios above 100% over the past four years. This provides ample capital for both organic growth and acquisitions.

Current Valuation

However, the brokerage notes that the stock currently trades at 98x/78x/58x on FY25E/FY26E/FY27E, significantly above its 10-year SD+1 average P/E (3-year average P/E is at 60x), even considering the high growth phase.

Given these factors, the brokerage has initiated coverage with a ‘Short’ rating and set a September 2025 target price of ₹9,830, based on a 60x EPS estimate for September 2026.