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  • May 23, 2024 - Dixon Technologies: Leading the Charge in India's Electronics Revolution

Dixon Technologies: Leading the Charge in India's Electronics Revolution

May 23, 2024

Dixon Technologies: Leading the Charge in Indias Electronics Revolution

Editor's note: If someone were to categorize the super high growth stocks of the past 5 years, Dixon Technologies would appear at the top of the list.

The stock price continues to surge along with the rising market.

And the momentum doesn't appear to slow down anytime soon as the electronics major is levelling the playing field with global giants and charging India's electronics revolution.

Earlier this week, Dixon Technologies informed that it will now make Alphabet Inc's super-premium Google Pixel 8 smartphones in India.

That's right! After Apple, even Google has decided to shift some of its business from China and diversify into emerging economies like India.

Mind you, for the past couple of years, enough has been written about Google's plans for a made in India Pixel phone.

Now, it's official. Contract manufacturer Dixon will make Pixel 8 devices, with a possibility that it may also manufacture older and upcoming models (the AI feature-heavy Pixel 9, which also has a new design language, is releasing later this year).

According to the company, Dixon's first batch of India-made Pixels may hit the market as early as September 2024.

Continue reading to find out more about this crucial deal and how Dixon Technologies is charging the electronics revolution in India.

Dixon Technologies: Leading the Charge in India's Electronics Revolution

Driven by increasing population and surge in disposable income in India, consumer durables sector is experiencing explosive growth, and Dixon Technologies is at the forefront of this revolution.

The consumer electronics champion recently announced steps to fuel its growth and support India's digital expansion.

Dixon Technologies has signed an agreement with Nokia to develop and manufacture telecom equipment.

The equipment will include fixed wireless access points and routers, to be developed for Nokia.

The deal is expected to earn the company a massive amount of Rs 15 billion (bn).

According to the vice chairman and managing director of Dixon, the product development is at its final stages, and commercial production will start from June or July of 2024.

Innovation Boom for Consumer Durables

The demand for a wide range of consumer durable goods is growing because of the ongoing increase in disposable income and technological innovation in India.

India is viewed by multinational organizations as one of the primary markets from which future growth is likely to originate in consumer durable sector.

In FY23 (April-November), electronics exports grew by 13.8%, the highest in the last 6 years.

With robust growth, India aims to achieve electronics manufacturing worth Rs 25 trillion (tn) in electronics exports of Rs 10 tn by FY26.

By 2025, India's consumer electronics and appliances industry is predicted to be the fifth largest in the world.

The Indian appliances and consumer electronics (ACE) market is predicted to nearly double in the next 3 years.

Innovation Boom for Consumer Durables

Moreover, the government has visioned India becoming a global export hub. It anticipates the Indian electronics manufacturing sector to reach Rs 25 tn by the end of FY25.

Dixon: A Crucial Player

Dixon Technologies: Leading Electronic Manufacturing Services (EMS) company specialises in consumer electronics, lighting, home appliances, CCTVs, and mobile phones.

Dixon - 9MFY24 Revenue Breakdown

It also undertakes reverse logistics operations. Besides, it manufactures security surveillance equipment, wearables & audibles, AC-PCBs.

The company operates on two models namely, Original Equipment Manufacturer (OEM) and Original Designing Manufacturer (ODM).

It has an annual capacity of 30 million smartphones and 50 million feature phones.

In terms of the financials, revenue has grown by a (compounded annual growth rate) CAGR of 40%, while the profit has grown by a 3-year CAGR of 29%.

The management is bullish on growth across verticals, especially the mobiles segment which contributes 60% of the topline.

ROE and ROCE were at 25.6% and 35.6% respectively in December 2023.

Management expects to maintain these return ratios going forward given better profitability, working capital management and higher asset turnover in the mobile and IT hardware segments.

Dixon Financial Snapshot (2019-23)

  FY19 FY20 FY21 FY22 FY23
Revenue Growth (%) 5.03% 47.43% 46.55% 65.89% 13.98%
Net Profit Margin (%) 2.11% 2.73% 2.48% 1.78% 2.09%
Return on Capital Employed (%) 27.33% 34.20% 32.83% 25.90% 27.98%
Return on Equity (%) 18.35% 26.41% 25.25% 22.20% 22.63%
Data Source:

Dixon - 1 Year Performance

Dixon's share price has grown by 8.7% in the last month and a massive 185.8% in the past year.

Why Consider Dixon for Your Watchlist?

We believe these are some of the reasons the company could be worth considering in your watchlist:

  • Building Blocks for Expansion are in Place

    Dixon has added two mobile clients and is in talks with worldwide brands about producing IT hardware under the government's production-linked incentive (PLI) plan.

    It is also undertaking backward integration in televisions with LED bars and injection moulding, as well as vertical integration to boost its mobile business.

  • Focusing on Design-Based Products

    The company is looking to design its own products.

    It previously operated on a high volume, low margin basis, but is now exploring new product categories with higher margins.

    Some of the topics covered in its annual report include electric vehicles, defense, drones, medical electronics, and telecom infrastructure.

  • Strong Capex Plans are Paving the way

    The company intends to undertake capex in the range of Rs. 3 bn -4 bn p.a., over the next two years, partly funded by external debt.

  • Focus on Paying off the Debt

    The company is estimated to have debt repayment obligations of Rs 900 m -1.1 bn p.a. in FY25 and FY26.

Peer Comparison

Company Market Cap (INR m) Current Market Price (INR) 5-Yr Net Profit CAGR (%) ROE (%) P/E (x)
Dixon Technologies 505.3 8,441 33 22.5 143.3
Voltas 436.7 1,319 -14 4.4 174.9
Crompton Greaves Consumer Electricals 21.9 341 7 18.1 50
KEI Industries 342.8 3,796 14 20.3 58.8
Orient Electric 49.1 230 3 13.5 67.6
Polycab India 888.9 5,914 28 20 53
Syrma SGS 85.2 480 NA 11.2 73.4
V-Guard Industries 153.9 354 6 12 76
Blue Star 294.6 1,430 17 21 71
Havells India 1,059.40 1,689 10 18.1 83.4
Data Source:

Dixon to Manufacture Google Pixel 8 Smartphone in India

As we mentioned at the start, Google has tied up with Dixon to manufacture the big tech major's flagship Pixel 8 smartphones in India.

According to reports, the trial production of the devices has already begun and the first batch of these made-in-India Google Pixel 8 phones could hit the shelves by September this year.

Initially, Dixon will manufacture 1 lakh units of Pixel 8 per month. Of these, 25-30% units will likely be exported.

This partnership comes right after Dixon's subsidiary Padget Electronics signed a crucial agreement to make smartphones for Taiwan-based Compal Electronics' customers in India. Compal is the manufacturing partner for Google globally.

This is a big win-win for both companies as it will help Dixon strengthen its market position even more, while Google will be able to skip the import duty of 22%... this may make Pixel 8 an attractive proposition in the Rs 50,000-plus mobile phones range.


With a good industry outlook and an emphasis on innovation and expansion, the company's share price and earnings have grown consistently.

However, there are plenty of checks that need to be undertaken before considering any stock to be investment worthy.

Before evaluating any company for investment, investors should always conduct extensive research and use their own judgment.

Happy investing!

Investment in securities market are subject to market risks. Read all the related documents carefully before investing

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If you're an investor, then you simply cannot ignore this opportunity.

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Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...

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