Dixon Technologies - Q4FY21 First Cut - ICICI Direct

(CMP: Rs. 3993; MCap : Rs. 23,390 crore)

Dixon Technologies reported a strong Q4FY21 performance over Q4FY20 on revenue and PAT fronts. On the margin fronts, change in product mix and sharp rise in raw material prices resulted fall in EBITDA margin in Q4.

Q4FY21 Earnings Summary

- Dixon Technologies reported a strong revenue growth of ~146% YoY to Rs. 2110 crore in Q4FY21 led by favourable base and new customer additions over the period

- On a segment wise revenue break-up, consumer electronics (TV), Mobile & EMS, Home appliances, lighting division and security systems revenues grew by 200%, 381%, 63%, 50% and 100% YoY to Rs. 1179 crore, Rs. 289 crore, Rs. 146 crore, Rs. 382 crore and Rs. 109 crore respectively

- The EBITDA margin declined by 273 bps YoY (82 bps QoQ) to 3.8% mainly due to lower gross margins. The gross margin declined by 565 bps YoY mainly due to change in product mix (consumer electronics and Mobile & EMS segments is relatively low margin business) and delay in passing on of higher raw material prices

- The PAT came in at ~Rs. 44 crore up by 61% YoY mainly tracking higher sales in Q4FY21

We believe, despite a loss of sales in Q1, Dixon reported a strong recovery in revenue and profitability in 9MFY21. For FY21, company reported a phenomenal growth in topline and PAT by ~47% and 33% YoY led by customer addition and launch of new products. Company has further guided of capacity expansions and entrance into new product categories (under the different PLI schemes) in next two years. On the margin front, while the near term margin is likely to remain under pressure due to low operating leverage (owing to lockdown), Dixon has maintained its long term EBITDA margin guidance at 4.2%- 4.5%. We maintained our positive stance on the stock and detailed report will be released soon.

Shares of Dixon Technologies (India) Ltd was last trading in BSE at Rs.3995.7 as compared to the previous close of Rs. 3993.5. The total number of shares traded during the day was 58975 in over 12290 trades.

The stock hit an intraday high of Rs. 4100 and intraday low of 3764.65. The net turnover during the day was Rs. 235226678.

Source : Equity Bulls

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