Shares of Dixon Technologies in Tuesday's early morning deals (December 19) traded over 2 per cent higher at Rs 6,403.85 apiece on the BSE. At the day's high, the stock scaled 3.4 per cent to notch levels of Rs 6,483.6. 

COMMERCIAL BREAK
SCROLL TO CONTINUE READING

The gains in the consumer electronics major were triggered after the global brokerage CLSA maintained its 'outperform' rating on the counter with an increased target price of Rs 7,070 from Rs 5,675 earlier.

The brokerage is of the view that Dixon continues to raise its addressable market with its recent agreement with Lenovo to manufacture laptops. The deal enables the company to foray into the IT hardware segment, for which it already has PLI (Production-Linked Incentive) scheme approval from the centre.

However, along with assembly, a higher degree of localisation is required to gain access to incentives. Hence, for Dixon, backward integration will be the key to the next leg of growth, the brokerage noted.

On Monday, Life Insurance Corporation of India (LIC) said in a BSE filing that it has pared its holding in Dixon Technologies (India) from 29,97,913 to 17,94,395 equity shares, decreasing its shareholding from 5.012 per cent to 3 per cent of the paid-up capital of the company.

Shares of Dixon Technologies have outperformed the BSE Sensex with a return of 58.8 per cent in the last one year. The stock hit its all-time high of Rs 6,765 on December 12.

Over the three years, the stock has generated multi bagger returns to the tune of 140 per cent.

Dixon Technologies is a design-focused products and solutions company. The company is engaged in manufacturing products in the consumer durables, lighting, and mobile phone markets in India.