Dixon Technologies is a contract manufacturer. The company is one of the largest design-focused and solutions company in India. Dixon is engaged in manufacturing products in the consumer durables, lighting and mobile phones/smart phones markets in India. Their diversified product portfolio includes consumer electronics like LED TVs; home appliances like washing machines; lighting products like LED bulbs and tube lights, downlighters; mobile phones/smart phones; CCTV & DVRS; and Medical Equipment. Dixon also provides solutions in reverse logistics i.e., repair and refurbishment services of set top boxes, mobile phones /smart phones and LED TV panels.
During the December earnings results, the company has reported that a new facility under the PLI scheme has been set up for producing inverted controller boards for ACs.
Dixon creates inverter controller boards as part of the 40-60 joint venture with Japan’s Rexxam. The JV company is a beneficiary under the PLI scheme and Dixon is planning on investing ₹510 million.
Usually, the first half of the calendar year is good for Dixon as summer season leads to higher sales. In 2022, Dixon had reported a 40% growth in sales and 43% growth in profit for the March 2022 quarter.
The company has already surpassed last year’s sales and profit figures by the third quarter.
During 2023, shares of Dixon have been under a heavy selling pressure. Dixon Technologies share price has been falling for year due to weak demand and other reasons.
However, the company is expecting recovery in sales led by a strong momentum in production-linked incentives (PLI) with fantastic growth in fresh segments of refrigerators, wearables, IT, etc.
Additionally, Dixon Technologies is forming a team for research and development and is planning for a foray into new product segments.
The stock price of Dixon has fallen down to the 61.8% retracement level where it receives incredible support. The price is under the 100-day exponential moving average and the weekly MFI is at 17 points which marks this stock as extremely oversold. Investors should capitalize on this opportunity for the long-term.
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