Dixon Technologies shares: There may be a huge fall in the shares of Dixon Technologies Ltd. Brokerage firm Philip Capital has given ‘Sell’ rating on this stock. The brokerage has set a target price of ₹9,085 per share for Dixon. This means that the stock is expected to fall by about 45% from the current price.
Why will Dixon’s shares fall?
According to the brokerage, Dixon faces client concentration risk i.e. excessive dependence on a few clients. The company’s biggest client is Motorola, whose sales have declined drastically in the Indian market.
Nearly 80% of Dixon’s mobile phone revenue in FY25 came from Motorola. This declined to 60% by Q2FY26. The reason for this is the decline in domestic sales. Additionally, competition from Apple and other Android brands has also increased.
Decrease in orders and fear of missing guidance
According to Philip Capital, Motorola has given the work of making 18% less mobile phones to Dixon Technologies this year (Q2FY26) as compared to last year. That means if earlier Dixon used to make 100 phones for Motorola, now it is making only 82.
The reason is that Motorola has now started giving some production of its phones to other manufacturing companies like Karbonn. This has reduced Dixon’s order volume.
The brokerage believes Dixon will not be able to achieve its Q1FY26 quarterly growth guidance of 15%. Because the orders from Motorola are decreasing. Also, the company’s stake is going to companies like Longcheer and Xiaomi.
Fear of cut in profits
Philip Capital says the current estimate of Dixon’s FY26 profit after tax (PAT) could face a double-digit decline in the coming period. At present this estimate is around ₹1,200 crore. Of the 36 analysts tracking Dixon, 27 have a Buy rating, 6 have a Hold and 3 have a Sell rating.
Status of Dixon’s shares
Dixon shares closed 3.40% lower at ₹16,610.00 on Tuesday. The stock has fallen 7.69% since the beginning of the year. However, it has given returns of 11.25% in the last 6 months and 8.81% in 1 year. It has given multibagger returns of 796.70% in 5 years. Dixon Technologies has a market cap of ₹1 lakh crore.
What is Dixon’s business?
Dixon Technologies (India) Ltd is a large electronics manufacturing company in India. It manufactures mobile phones, TVs, washing machines, lighting products and other consumer electronics. The company does not run its own brand, but produces products for other big brands like Motorola, Samsung, Xiaomi, Philips and Panasonic. This is called contract manufacturing.
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