DIXON - Dixon Technologies (India) Limited Share Price

Dixon Technologies (India) Limited's management provided an optimistic outlook during the Q2 FY26 Earnings Conference Call. They reported consolidated adjusted revenues of INR 14,858 crores for the quarter ended September 30, 2025, representing a growth of 29% year-over-year compared to INR 11,528 crores in the same period last year. The consolidated adjusted EBITDA climbed 34% to INR 564 crores from INR 420 crores, while the consolidated adjusted PAT increased by 27% to INR 323 crores from INR 236 crores.

Key forward-looking points highlighted by management include:

1. Mobile Business Growth: Revenue for the mobile segment reached INR 13,361 crores with a growth of 41%, with expectations to maintain volumes between 40-42 million units this fiscal year and aiming for 55-60 million units next year.

2. Joint Ventures: The management detailed plans for a 74:26 JV with HKC for display modules, with an initial capacity of 24 million units for smartphones and plans to scale up to 60 million units. Additionally, they acquired a 51% stake in Q Tech India, projecting the possibility of increasing smartphone camera module revenues from INR 2,000 crores to INR 6,000-7,000 crores within two to three years.

3. Strong Order Book: Telecom segment revenues surged 148% year-over-year to INR 1,635 crores, attributing this growth to expanding capacity for consumer premises equipment (CPE) and establishing relationships with major global telecom partners.

4. Capex Commitments: Management committed approximately INR 3,000 crores for backward integration, targeting energy-saving components and Automotive products in the next three years.

5. Optimism for Electronics Manufacturing: The company's mid to long-term prospects are highlighted by a focus on expanding its product portfolio across various segments, including home appliances, lighting, and IT hardware.

The management's emphasis on maintaining financial discipline reflects in the negative working capital cycle managed at negative 6 days and a net debt position of INR 203 crores, supporting their growth strategy.

Certainly! Below are the major questions asked in the Q&A section of the earnings transcript along with detailed answers provided:

Question 1: Aditya Bhartia: My first question is on the ODM customer in the mobile phone side. It would help if you could share some more details on how large the customer is and what kind of volumes one can expect from that or any other information that you can share around that?

Answer: We are in discussions with a large ODM for smartphones. We expect this business to start by the end of Q4 this fiscal or early Q1 next fiscal, targeting around 0.5 million units per month. However, I cannot share more granular details at this time.

Question 2: Aditya Bhartia: You mentioned the telecom business possibly becoming the second-largest growth avenue. What kind of growth should we anticipate over there, and how big could the export opportunity be on the telecom side?

Answer: We grew from INR 700 crores and expect to reach around INR 4,800 crores this year. Our focus is on complex network equipment, with a significant U.S. order for radios. This segment could potentially grow to close to $1 billion within a couple of years as we continue to expand our exports.

Question 3: Siddhartha Bera: Can you share targets for mobile volumes this year and next year? Previously, we expected 43 to 44 million this year. Does that remain on track?

Answer: We maintain our expectation for this year at around 40 to 42 million units. Next year, with expected growth from partners like Vivo, we aim for 55 to 60 million units.

Question 4: Vipraw Srivastava: Given the festival is now over, what is your outlook for mobile phone volumes for Q3 and Q4?

Answer: While providing specific numbers is challenging at this stage, we expect to see around 42 million units during the festival. We've already achieved approximately 20 million units so far.

Question 5: Dhruv Jain: Regarding the Longcheer JV, what volumes do you expect, and is that included in the 55 million to 60 million volume guidance for next year?

Answer: The Longcheer JV is expected to become operational in Q1 next fiscal, with anticipated volumes of 8 to 10 million units. These will be part of the 60 to 65 million guidance we provided.

Question 6: Pankaj Tibrewal: Looking ahead, which segments can drive growth for the company over the next few years?

Answer: Beyond mobile, we are focusing on components, telecom products, IT hardware, and lighting. Establishing strong relationships globally and expanding into the automotive sector through our JV should also fuel growth.

Question 7: Vaishnavi Gurung: Can you share the percentage revenue contribution from major anchor clients?

Answer: Unfortunately, we do not disclose the specific revenue share of our anchor clients as it remains confidential.

Question 8: Rahul Agarwal: With the promoter holding now at 29%, will there be any further liquidation by the promoters?

Answer: The combined holding of promoters is over 42%. We do not foresee any further dilution occurring at this time.

Question 9: Achal: Regarding the PLI discussions, do you expect any extensions, and what will be the impact if it expires?

Answer: Discussions for additional support for the mobile sector have started, but they are in preliminary stages. We could see margin pressure for a few quarters if it expires before we reap the benefits of our integration plans.

These questions and answers reflect the key points discussed in the Q&A session of the earnings call, maintaining the essence of the engagement.