Buy This Stock With A Target Price Of Rs. 5700: Edelweiss Recommends

Target Price

The Current Market Price (CMP) of Dixon is Rs. 5112. The brokerage firm, Edelweiss Recommends has estimated a Target Price for the stock at Rs. 5700. Hence the stock is expected to give an 11.5% return, in a Target Period of 1 year.

Company performance

Dixon's revenues stood at Rs. 64,482 mn, in FY 21, and the brokerage firm is expecting it is to grow Rs. 1,29,380 mn, in FY 22, and Rs. 1,90,344 mn in FY 23. Additionally, the company's EBITDA stood at Rs. 2,866 mn, in FY 21, and the brokerage firm is expecting it to grow Rs. 5,312 mn, in FY 22, and Rs. 8,202 mn, in FY 23. Dixon is well on track to comply with mobile PLI ceiling, and also to achieve revenue of Rs. 70 bn (FY23E).

Comments by Edelweiss

Maintaining a buy rating, the brokerage firm said, "Dixon's sustainable returns-centric scale ambition reinforces confidence w.r.t. opportunity basket. Automation, migration to ODM (especially mobile phone), and a downstream component ecosystem are critical to its long-term revenue and competitive edge."

Edelweiss added, "Expanding into scalable and new categories, Dixon has a clear long-run returns threshold, which is a clear filter. In our view, while global business would pose challenges to overall returns as it offers high scale, Dixon's ability to generate returns above the expected rate would remain key for stakeholders."

About the company

Dixon Technologies provides design-focused solutions in consumer durables, home appliances, lighting, mobile phones, and security devices, set-top boxes, mobile phones, and LED TV panels.

Disclaimer

The above stock was picked from the brokerage report of Edelweiss. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage house are not liable for any losses caused as a result of decisions based on the article.