On Friday, Dixon Technologies shares are expected to gain attention after the electronics manufacturer reported a huge 265% increase in profit for the July-September quarter of FY25. The company’s net profit soared to Rs 412 crore, driven by a rise in mobile phone production and a one-time gain of Rs 209.6 crore.
Dixon’s revenue also saw a big jump, rising 120% from Rs 4,944 crore last year to Rs 18,116 crore in the same period this year.
A major part of this exceptional gain came from Dixon’s decision to sell its entire 50% stake in its joint venture, AIL Dixon, to Aditya Infotech. This sale of 95 lakh shares boosted profits. Excluding this one-time gain, the company’s net profit still increased by 109% to Rs 236 crore.
Following these strong Q2 results, Investec maintained its ‘Buy’ rating for Dixon and raised the target price from Rs 12,700 to Rs 15,900. The brokerage firm highlighted Dixon’s growth in the IT hardware space and believes this sector offers significant expansion opportunities for the company. They also expect Dixon’s move into manufacturing components to boost its competitiveness and profitability.
Dixon also announced that it will give 1.85 lakh stock options to its employees and those in its subsidiaries and joint ventures. These stock options can be converted into equity shares of the company.
In terms of performance, Dixon’s mobile phone manufacturing division was a major contributor, accounting for 57% of revenues and 47% of operating profit. This division earned Rs 9,444 crore in revenue and Rs 308 crore in profit. This includes Rs 263 crore from hearables and wearables and Rs 660 crore from telecom equipment production.
The company’s recent acquisition of a majority stake in Transsion’s manufacturing unit, iSmartu, added Rs 1,111 crore in revenue during the quarter.
However, Dixon’s consumer electronics and appliance division, which makes LED TVs and refrigerators, saw a drop in its share of revenues, falling from 29% last year to 12% in Q2 FY25. Its contribution to operating profit also fell from 25% to 12%, with the division earning Rs 52 crore in profit from Rs 1,413 crore in revenue.
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