Dixon Technologies stock hits all-time high after subsidiary bags Lenovo contract
Dixon Technologies shares surged 5 per cent in early trade, reaching a 52-week high at Rs 6,710.40 early on December 12, following the announcement of a significant contract from Lenovo.
As of 9:20 am, Dixon Technologies was trading at Rs 6,691.90, marking a 5.02 percent increase on the Bombay Stock Exchange (BSE). However, the stock pared some gains to trade 2.71 per cent higher at Rs 6,544.65 apiece at around 12:07 pm.
Lenovo has granted Padget Electronics Private Limited, a wholly owned subsidiary of Dixon Technologies, a manufacturing contract for IT hardware products related to laptops and notebooks under the Production Linked Incentive 2.0 scheme.
The finalisation of the agreement is subject to the signing of a definitive contract in the due course, as stated by the company in a stock exchange filing.
On November 30, Padget Electronics inaugurated a smartphone manufacturing plant in Noida, Uttar Pradesh, signaling further expansion for Dixon Technologies.
Dixon Technologies is a design-centric solutions company actively involved in the production of various consumer durables, lighting solutions, and mobile phones within the Indian market.
The company’s manufacturing portfolio encompasses a wide range of products, including LED TVs, washing machines, mobile phones, CCTV & DVRs, medical equipment, wearables, as well as lighting solutions such as LED bulbs and tubelights.
Despite the positive development, foreign research firm Morgan Stanley has maintained an ‘under-weight’ rating on the stock with a target of Rs 4,374 per share. The Total Addressable Market (TAM) for IT hardware products is estimated at $12 billion, with imports accounting for $9 billion of this amount. IT hardware encompasses laptops, tablets, all-in-one PCs, servers, and ultra-small form factor devices.
Lenovo holds a global market share of 20-23 per cent for desktops and laptops, and 7-10 per cent for tablets.
Dixon Technologies reported a 39 per cent increase in net profit for the September quarter, reaching Rs 107.32 crore, while revenue experienced a 28 per cent rise, totaling Rs 4,943.18 crore.
