Dixon Tech Shares Surge 3% After Doubling Q1FY26 Profit

On Wednesday, the Dixon Tech shares jumped 3.5 percent, touching a day’s high price of Rs 16,660 on NSE after its strong performance in its Q1FY26 results. The company’s consolidated net profit doubled year-on-year, coming in at Rs 280 crore compared to Rs 140 crore in the same period last year, driven by a dramatic surge in operational revenues, which reached Rs 12,836 crore, up 95 percent from Rs 6,580 crore. EBITDA grew at a robust 89 percent to Rs 484 crore, with margins staying healthy at 3.8 percent. While the company’s bottom line and operating metrics reflect the benefits of scale and operational efficiency.

A major share of revenue continues to be generated by Dixon’s mobile and EMS segment, which accounted for an impressive Rs 11,663 crore, ?a staggering 125 percent jump year-on-year, and now forms over 90 percent of the company’s total revenue. Growth here was fuelled not only by large order flows from domestic and international brands but also by aggressive client additions and a significant pickup in export momentum. Dixon shipped approximately 9.7 million mobile units during the quarter, and the management is targeting even higher volumes in the subsequent quarters, aiming for around 43 million units for the year. The telecom and networking division posted revenues of Rs 1,410 crore. This performance was driven by new product launches in networking and increased domestic demand for fixed wireless access devices, underlining the effectiveness of Dixon’s capacity expansion and backward integration strategies.

On the other hand, certain legacy verticals like consumer electronics (mainly LED TVs and refrigerators) experienced headwinds, with revenues contracting by 21 percent to Rs 672 crore. Nevertheless, a sharp rise in operating profit, which is up by 38 percent YoY for this segment, suggests that Dixon’s cost optimisation efforts and process improvements enabled operational resilience. Home appliances grew modestly at 3 percent to Rs 313 crore, while the lighting division saw a 17 percent revenue dip to Rs 188 crore. The company remains bullish on reviving these segments and has struck strategic JVs, such as with Signify (Philips) in lighting, to accelerate innovation and expand product offerings.

Management commentary post-results remained distinctly optimistic. Strategic JVs with players like Longcheer, Qtech, and Vivo are expected to improve Dixon’s leadership in both the domestic and international EMS markets. The management projects significant margin expansion, around 120 to 130 basis points in FY26, and expects further improvement in FY27 as new business lines and backward integration into key components begin to contribute significantly. While acknowledging risks posed by the approaching expiry of the PLI scheme, management outlined robust mitigants, including premiumisation, deeper component manufacturing, and expanded exports.

In the recent earnings call, Dixon Technologies management stated that the completion of an 8 million sq ft mobile manufacturing campus in Noida is expected by March 2026. New joint ventures will deepen backward integration for camera modules (with QE India), display modules (with HKC), and precision components (with Chongqing UI) capacity to expand for refrigerators to 2 million units and washing machines to 3.8 million units. New product lines include robot vacuum cleaners and premium lighting through a JV with Signify, targeting exports. IT hardware production, including servers and notebooks through an Inventech JV, is also ramping up.

In light of this performance and strategic direction, brokerages have largely looked into Dixon’s outlook. Motilal Oswal has reiterated its “Buy” rating, raising the target price to Rs 22,100, citing sustainable volume-driven growth and execution discipline. Emkay Global remains bullish with a target price of Rs 19,000, pointing to long-term benefits from capacity addition and backward integration despite some near-term impact from minority interest on JVs. Nuvama Institutional has a more balanced “Hold” stance with a target of Rs 16,100, applauding the growth strategy but warning about policy and valuation risks. Even with valuation concerns, Goldman Sachs maintained a “Sell” rating on the stock and raised their target to Rs 11,110.