Dixon Tech woos Street with strong Q4 show, upbeat management commentary, dividend

Dixon Tech shares were in high demand on Dalal Street on Wednesday, a day after the electronic goods maker reported a strong set of numbers for the quarter ended March 2023. The stock of Noida-based Dixon Tech — a provider of design-focused solutions operating in areas such as consumer durables, home appliances, lighting and security devices — jumped by Rs 249.6 or 7.6 per cent to touch Rs 3,525.3 apiece at the strongest level of the day on BSE. 

Dixon Tech Q4 results

After market hours on Tuesday, Dixon Tech reported a 29 per cent rise in net profit to Rs 81 crore for the three-month period compared with the corresponding quarter a year ago. Its revenue grew four per cent on a year-on-year basis.

The company's margin, a key measure of profitability for a business, improved to 5.1 per cent from four per cent a year ago. Read more on Dixon Tech Q4 results

Dixon Tech's management expects the company's EBITDA margin to improve by 30-40 basis points in the current financial year.

Dixon Tech dividend

Dixon Tech's board recommended a dividend of 150 per cent for shareholders.  

EDITOR'S TAKE | What Anil Singhvi makes of Dixon Tech Q4 results

Zee Business Managing Editor Anil Singhvi pointed out that the company staged a robust performance in the March quarter along with a strong commentary from the company's management. 

The Dixon Tech management expects an improvement in its margin as well as a few big deals and the only risk in the stock is that it has run up 10 per cent in the past few days. 

What to do with Dixon Tech shares

Zee Business Analyst Varun Dubey recommends buying Dixon Tech futures for a target of Rs 3,360 with a stop loss at Rs 3,250.

How brokerages view Dixon Tech 

Goldman Sachs maintained a 'neutral' rating on Dixon Tech, citing largely priced-in growth, and raised its target price for the stock by Rs 310 to Rs 3,370 per share. 

The company made a comeback in the quarter with a performance better than Street expectations after many quarters, according to the brokerage. 

Goldman Sachs also said Dixon Tech is a major beneficiary of the government's Make in India push across products.  

ICICI Securities retained 'reduce' on Dixon Tech, citing an unfavourable risk-reward ratio. The brokerage values Dixon at 52.8 times its estimated earnings for the year ending March 2024. 

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