Dixon Technologies Shares Plunge To 16-Month Low, Year-To-Date Losses Hit 33% Amid Investor Concerns

Mumbai: Shares of electronic manufacturing services company Dixon Technologies fell for the sixth straight session on Monday, December 29, dropping 4 percent to Rs 11,821, marking the lowest level since August 2024. The stock has been under heavy selling pressure since late September, losing 35 percent from Rs 18,471, driven largely by concerns over potential cuts to earnings per share estimates for FY27.

Investor sentiment was further impacted by a bearish outlook from global brokerage Morgan Stanley. The firm retained its 'Underweight' rating on Dixon, with a target price of Rs 11,563. Morgan Stanley highlighted that the extension of IT hardware import norms has created growth uncertainty for domestic manufacturers. These norms allow global brands like Acer, Lenovo, HP, and Asus to continue importing products under specific licenses, limiting opportunities for local players.

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Over the past two years, Dixon has maintained its IT hardware revenue guidance of Rs 48,000 crore up to FY31, compared with Morgan Stanley’s estimate of Rs 43,000 crore. The brokerage expressed doubts about meeting this target, with IT hardware expected to contribute only around 7 percent of Dixon’s FY30 revenue.

Despite the negative outlook, CLSA reiterated an 'Outperform' rating on Dixon with a 12-month price target of Rs 18,800. CLSA cited pending approvals for Dixon’s Vivo joint venture and component facilities under the government scheme as potential growth drivers. However, the brokerage noted medium-term growth remains uncertain due to a saturated smartphone market. Dixon’s 44x valuation is considered undemanding, reflecting these concerns.

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Dixon’s shares are on track for their first annual decline in two years, with a 33 percent year-to-date drop in 2025. This contrasts sharply with the 173 percent surge seen in 2024. Nevertheless, the company’s long-term performance remains strong, with a three-year gain of 204 percent and a five-year rise of 340 percent, suggesting resilience despite short-term volatility.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Readers should consult a qualified financial advisor before making any investment or trading decisions.