Dixon Tech Shares Volatile After Q4: Brokerages Advise Caution

Shares of Dixon Technologies were volatile on Thursday as the company’s results for the quarter ended March came out in the after-market hours on Wednesday.

What Happened: During the March quarter, Dixon Technologies reported a 24.7% year-on-year increase in net profit, reaching ₹98.5 crore, compared to ₹79 crore in the corresponding quarter of last year. The company’s revenue from operations surged by 52% to ₹4,658 crore, up from ₹3,065 crore in the same period of the previous year.

At the operating level, EBITDA rose by 17.3% to ₹183 crore in the reporting quarter, with the EBITDA margin standing at 4%, slightly down from 5.1% in the fourth quarter of the previous fiscal year. The company also announced a ₹5 per share dividend.

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Analyst Reactions: Jefferies maintained its “underperform” rating for the stock but raised the price target to ₹6,350 from ₹5,920. The research firm said that the company’s performance for the quarter was in line with estimates. The analysts highlighted that the mobile segment drove sales again.

Kotak Securities also maintained its “sell” rating for the stock rating the price target to ₹6,000 from ₹5,800. The brokerage said that the company’s revenue for the quarter missed its estimates by 10% while profits came in 18% lower. The analysts highlighted the company’s weak execution in the home appliance and consumer electronic segments.

HDFC Securities maintained its “add” rating for the stock raising the target price to ₹8,000 from ₹7,700. The brokerage said that it favours the company in the Electronics Manufacturing Services (EMS) sector due to its expertise, scalability, backward integration, customer-centric approach, superior facilities, and institutionalised processes.

Price Action: Dixon Tech’s share price was up 0.76% to trade at ₹8,164.80 as the markets opened on Thursday.

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