Dixon Technologies - Q3 FY21 Result Update - YES Securities

(Rating: ADD, TP: Rs15,430, Downside 2%)

Strong beat led by TVs and lighting; exploring more PLI schemes after mobiles

- Significant beat led by broad-based growth across verticals (especially TVs and lighting) given improved consumer sentiment and strong festive demand for electronics

- While RM headwinds on account of component shortage can limit revenue growth and impact margins in the near term in the ODM business, the OEM business should keep exhibiting strong growth trends.

- The management is confident of delivering well above ceiling revenues in the mobile PLI segment and is also looking at benefitting from upcoming PLI in other products like lighting, wearables, laptops and set top boxes.

- We increase our FY22 and FY23 EPS estimates by 16% and 12% respectively to factor in better realizations in TVs and higher growth rates in washing machine and lighting segments.

- While we remain structurally positive on the story, would wait for better entry points in the stock and reiterate our ADD rating with a PT of Rs 15,430 based on 40x FY23E earnings.

Shares of Dixon Technologies (India) Ltd was last trading in BSE at Rs.15716.9 as compared to the previous close of Rs. 15172.25. The total number of shares traded during the day was 6809 in over 2803 trades.

The stock hit an intraday high of Rs. 15883.2 and intraday low of 15322.3. The net turnover during the day was Rs. 106131504.

Source : Equity Bulls

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