Dixon Technologies shares rise as UBS upgrades it to buy rating, sees 27% upside

Shares of Dixon Technologies rose over 1.4% to their day’s high of Rs 18,400 on the NSE on Thursday, September 25, after global brokerage UBS turned bullish on the stock, upgrading it to a ‘Buy’ rating and setting a price target of Rs 23,000 per share. Analysts imply an upside potential of nearly 27% from the last close of Rs 18,161. With today’s gain, the stock is up for a second consecutive session.

According to a CNBC TV-18 report, UBS said Dixon is well placed to ride the next leg of its growth cycle as it expands into non-semiconductor smartphone components such as displays, camera modules, enclosures and batteries through backward integration. The brokerage expects this move to lift EBITDA margins by 110 basis points by FY28E, compared with a 40-basis-point gain pencilled in by consensus estimates, even as the mobile Production-Linked Incentive (PLI) scheme is set to wind down by FY26.

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The global firm also flagged Dixon’s rapid inorganic expansion — including partnerships such as Signify JV, LongCheer JV, Ismartu acquisition, Vivo JV and Inventec JV — as a key driver of growth. These ventures, it said, will help the company tap into a larger addressable market, enter new categories, deepen vertical integration and forge more global collaborations.

UBS forecasts Dixon’s revenue to reach $11 billion (about Rs 91,500 crore) by FY28E, which is roughly 2.5 times its projected revenue for FY25. Beyond FY28E, growth could be supported by component sales beyond captive use, rising exports, new verticals such as networking and servers, and further inorganic opportunities.

The brokerage added that the company’s ability to scale up operations without eroding returns is underpinned by expected margin expansion, which should offset lower asset turnover. However, it flagged a delayed ramp-up in the component business as a key risk to its outlook.

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Q1 Performance Snapshot

The company reported a consolidated net profit of Rs 280.02 crore for the first quarter ended June 2025, surging 100% year-over-year (YoY) compared to a profit of Rs 139.70 crore in the corresponding quarter of last year.The company said its revenue from operations for the first quarter of FY26 rose 95% YoY to Rs 12,835.66 crore, compared to Rs 6,579.80 crore in the corresponding quarter of FY25.

Earnings before interest, tax, depreciation and amortisation (EBITDA) for the June quarter stood at Rs 484 crore, up 89% from Rs 256 crore a year earlier.

At 9:20 am, shares of the company were trading at Rs 18,315, rising 0.85% from the last close. In the last two years, the stock has surged 277%, increasing from Rs 4,809 to Rs 18,000 levels.

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