23 Jul , 2025 By : Debdeep Gupta
Shares of Dixon Technologies rallied as much as 3 percent to Rs 16,540 on July 23 after the company reported its first quarter earnings. A slew of brokerages have dished out bullish calls on the stock, while Morgan Stanley remains underweight, citing a broad-based Q1 miss.
The EMS major on July 22 reported a net profit of Rs 225 crore for the first quarter of the financial year 2026. This marks a 68 percent on-year jump from the Rs 134 crore net profit reported in the corresponding quarter of the previous financial year.
The leading EMS player's revenue from operations meanwhile soared 95 percent on-year to Rs 12,836 crore in Q1 FY26. The company had earlier reported a revenue of Rs 6,579.8 crore for Q1 FY25. EBITDA grew 89 percent on-year to Rs 484 crore, while EBITDA margin rose to 3.8 percent during the quarter under review.
Dixon Tech's mobile and other EMS segment saw a 125 percent on-year rise in revenue to Rs 11,663 crore. Operating profit for the segment meanwhile surged 131 percent on-year to Rs 395 crore.
Nomura has maintained a 'Buy' rating on Dixon Technologies with a target price of Rs 21,154 per share. This implies an upside potential of 31 percent from the last close. The brokerage said execution remains on track across both mobile and component segments. Dixon's Q1 earnings came in ahead of estimates, and the ramp-up in mobile production is expected to continue. Nomura also expects margin tailwinds from the scale-up of multiple joint ventures, projecting EBITDA margins to rise from 3.9 percent in FY26 to between 4.4–4.7 percent in FY27–28.
CLSA has a high-conviction 'Outperform' call on the stock, with a target price of Rs 19,365 per share. It noted that Q1 results beat expectations and reiterated the company's FY26 smartphone production guidance of 41–43 million units, up from 28 million in FY25. CLSA believes future growth will be driven by the Vivo joint venture, exports, and other segments. Margin expansion is also expected as component manufacturing scales up, even after the Production-Linked Incentive (PLI) benefits taper off in FY27.
In contrast, Morgan Stanley has an 'Underweight' rating on Dixon, with a target price of Rs 11,563 per share. The brokerage flagged a broad-based revenue miss in Q1 across most segments. Although operating expenses and employee costs improved, EBITDA was below estimates, and PAT missed forecasts by 11 percent. Margins were mixed across different verticals.
Dixon Tech shares are down 8 percent since the beginning of the year.
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