Shares of Dixon Technologies were rising on Tuesday after the company said that its subsidiary has signed a contract with desktop maker HP India.

What Happened: Dixon’s wholly-owned subsidiary Padget Electronics has signed a Memorandum of Understanding with HP India for the manufacturing of notebooks, desktops and all-in-one PCs, the company said in a press release on Monday. The deal is subject to the signing of definitive agreements, the company added.

“We are sure that with HP's vision and rigorous industry-leading processes, combined with our expertise in manufacturing, we will be able to bring a range of HP personal systems to Indian customers," Atul B Lall, vice chairman and managing director at Dixon Technologies said about the partnership.

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Brokerage View: Morgan Stanley had an “equal-weight” call on the tech firm with a target price of ₹8,696, which represents a 31% downside from its current market value.

The brokerage had a positive outlook on their association, noting that HP enjoys a 28%-30% market share in India’s desktop and notebook segment. Lenovo and Acer have around 15% market share each.

Last month, Dixon Technologies was among the several companies that entered the MSCI India index in its August rejig.

Price Action: Shares of Dixon Technologies were up 1.47% ₹12,581.85 on Tuesday morning.

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