Global brokerage Nomura has reiterated its 'buy' stance on Dixon Technologies after the consumer discretionary firm posted better-than-estimated Q2 earnings. The brokerage has also raised the target on the stock to Rs 18,654 from the earlier Rs 15567, signifying nearly 24 per cent potential upside from the previous close.

COMMERCIAL BREAK
SCROLL TO CONTINUE READING

After clinching an all-time high of Rs 15,999.95 at the open, the stock in early traded tumbled sharply by over 9 per cent to Rs 13,668.25 per share.

The brokerage underlined that the company's 2Q was led by mobiles; while its IT hardware & components segment offers a major long-term opportunity. The brokerage has raised revenue estimates by 10 per cent/ 8 per cent/ 5 per cent and EPS by 3-5 per cent for FY25-27F.

Focus on component manufacturing will be a key margin tailwind, with full impact to be visible from FY27F, added the brokerage.

Dixon Tech Q2 results

For the July-September quarter, the company's consolidated PAT climbed 265 per cent on-year to Rs 412 crore as against Rs 113 crore reported during the same period last year. Zee Business research estimated net profit at Rs 217 crore. Sharp gain in the profit during the review period was on the back of exceptional gain to the tune of Rs 210 crore. The revenue at the home electronics and appliance firm also increased 133 per cent year-on-year to Rs 11,534 crore as against Rs 4,943 crore during the same period last year.

Zee Business analysts estimated revenue for the review quarter at Rs 9,200 crore.

Dixon Tech share price performance

The stock over the last year has delivered multibagger return of 155 per cent.