Buy This Multibagger Consumer Durables Stock For a Potential Upside Of More Than 16%

Outlook of Dixon Technologies Ltd

Dixon Technologies (India) Limited is the largest domestically based manufacturer of products for the consumer durables, lighting, and mobile phones/smartphones markets in India. Their wide range of products includes consumer electronics, such as LED TVs, downlighters, mobile phones/smartphones, lighting items such as LED bulbs and tube lights, household appliances such as washing machines, CCTV & DVRs, and medical equipment. The company also offers reverse logistics solutions, such as mobile phone/smartphone refurbishment, set-top box repair and refurbishing, and LED TV panel refurbishing.

Outlook of Dixon Technologies Ltd Stock

As mentioned above, Dixon Technologies is a large-cap stock from the consumer durable sector with a market capitalization of Rs. 25 831 Crores. The stock is trading at the current market price of Rs. 4,353, and it has a 52-week high of Rs. 6,244 and a 52-week low of Rs. 3 181. In the short and mid-term, the company has given average returns, over 3 months, the stock gained 20.92%, over a year, the stock gave negative returns of -10.26%, however in the long-term period of 3 years, the stock gained whopping 646.53%.

Buy Call of Sharekhan On Dixon Technologies

According to the latest report of Sharekhan, "Dixon Technologies with its leadership in outsourcing EMS industry is well poised to be one of the key beneficiaries of the government's impetus on increasing domestic manufacturing through PLI schemes."

Furthermore, "The company is set for a strong growth trajectory over the next 3-4 years with the management targeting to triple its size through customer acquisition across verticals, foray into new products, backward integration and growth in exports. Further, margins are expected to improve backed by cost optimization, operating leverage and decline in commodity prices. We envisage revenue/PAT CAGR of ~33%/~49% over FY22-25E. We roll forward our estimates to October FY24E EPS and maintain our Buy rating on the stock with a revised price target of Rs. 4,960."

Key Risks For Buy Call of Sharekhan

The report of Sharekhan has mentioned two key risks for the buy call of Dixon Technologies. The report said,

• "A delay in the commissioning of CAPEX projects, the slowdown in consumer discretionary spends, and the discontinuation of business from key customers might affect revenue growth.

• Adverse raw-material prices, delay in the ability to pass on price hikes adequately in time, and adverse forex fluctuation might affect margins."