Q2 profit up 265% to Rs. 412 crore, Dixon Technologies shares are in focus

Shares of electronics contract manufacturer Dixon Technologies will be in focus on Friday after the company posted a 265% year-on-year rise in net profit to Rs. 412 crore and in the second financial year Rs. 209.6 crores was reported as extraordinary profit. quarter of FY2025.

Dixon grew revenue by 120% year-on-year in the July-September period to Rs. 18,116 crore, which was Rs. 4,944 crores.

Meanwhile, in the second fiscal quarter, Dixon Technologies announced that it will divest its entire 50% stake in the joint venture company AIL Dixon to Aditya Infotech through the transfer of 95 lakh equity shares of the JV. The transaction resulted in a one-time extraordinary gain.

Adjusted for extraordinary gains, the company’s net profit rose 109% year-on-year in Q2 FY25 to Rs. 236 crores.

After the Q2 results, Investec maintains its ‘Buy’ rating on Dixon and, following a strong Q2 performance driven by a sharp increase in mobile revenue, has a target price of Rs. 12,700 to Rs. 15,900 has been done.

The firm continues to believe that IT hardware represents an attractive growth opportunity for Dixon, with significant potential for expansion in this sector. Additionally, Dixon’s entry into components manufacturing is expected to further enhance its competitive strength and profitability, positioning the company well for future growth, the brokerage firm said.

The company has also approved grant of 1.85 lakh stock options in one or more phases to the employees of the company and its subsidiary and joint venture entities. These stock options are worth Rs. Convertible into equal number of equity shares of the company with a face value of 2.

The company’s mobile phone manufacturing division contributed 57% to quarterly revenue and 47% to operating profit. The mobile phone department has spent Rs. 9,444 crore in revenue and Rs. 308 crores in operating profit. This includes revenue from hearable and wearable products (Rs 263 crore), telecom equipment (Rs 660 crore).

With Dixon’s recent acquisition of a majority stake in Transsion’s manufacturing unit, Esmartu in the fiscal second quarter posted Rs. 1,111 crore in revenue.

Revenue contribution from the company’s consumer electronics and appliance division, which makes LED TVs and refrigerators, fell to 12% in Q2 FY25 from 29% a year ago, while operating profit contribution fell to 12% from 25% a year ago. The appliance division has revenue of Rs. 1,413 crore behind Rs. 52 crores operating profit was made.

(disclaimer: Recommendations, suggestions, opinions and views given by experts are their own. (These do not represent the views of The Economic Times)