Dixon Technologies Shares Dip 4% Amid Sluggish Growth Forecast for FY25

Dixon Technologies' stock price experienced a decline of around 4% after the company projected slower growth for the fiscal year 2025. The dip comes as the company undergoes a transitional phase, focusing on expanding its capabilities and adjusting to current market demands. At 10:21 am, Dixon's shares were trading at Rs 12,666.05 on the National Stock Exchange (NSE), reflecting a 3.8% drop.

Dixon has set a revenue target of Rs 3,500 crore for FY25 while planning to reach Rs 48,000 crore over the next six years within the IT hardware sector. The company is also negotiating with two major global Original Equipment Manufacturers (OEMs) to secure server contracts, a move aligned with its broader growth strategy as detailed by Atul Lall, the company's Vice Chairman and Managing Director.

Despite the short-term forecast, Dixon Technologies remains optimistic about its future. The mobile segment continues to be a key growth driver, contributing significantly to the company's revenue mix. Lall highlighted in an interview with CNBC TV-18 that the mobile segment is expected to generate about 70% of Dixon's revenue for FY24-25. Moreover, the margin profile for laptops and notebooks, which ranges between 3.5% and 4%, mirrors that of its mobile device segment, emphasizing its importance to Dixon's overall financial health.

Recently, Dixon Technologies was added to the MSCI Global Standard Index, a development expected to bring substantial passive investment inflows, estimated at $257 million. However, the stock faced selling pressure as UBS Principal Capital Asia Ltd. sold 6.86 lakh shares, representing a 1.15% stake, for Rs 904.12 crore through open market transactions at an average price of Rs 13,178.47 per share, according to bulk deal data from the NSE.

Despite the recent dip, Dixon Technologies has shown impressive performance over the past year. The stock has surged 96% this year, significantly outperforming the Nifty index's 16% return. Over the last 12 months, Dixon's stock has risen by 147%, more than doubling its value compared to Nifty's 30% gain during the same period.

According to Motilal Oswal, Dixon's stock remains in a strong uptrend, trading above its short-term moving averages. The brokerage suggests that investors consider buying the stock with a stop loss below Rs 12,650 on a closing basis, targeting a new all-time high towards the Rs 14,250 level.

[Disclaimer: This content is for informational purposes only and should not be considered financial advice. Investors should perform their own research or consult with a qualified financial advisor before making investment decisions.]