Dixon Technologies shares gained about 13% on November 2, 2026, as Motilal Oswal raised its target price to Rs 15,900. While the company reported a strong 47% rise in revenue, investors are weighing this against a 48.7% decline in quarterly net profit and ongoing margin pressure.
Dixon Technologies shares rose approximately 13% on November 2, 2026, following a positive assessment from brokerage firm Motilal Oswal. The brokerage raised its target price for the electronics manufacturer to Rs 15,900 from Rs 15,400, citing confidence in the company’s long-term volume growth within the mobile and electronics manufacturing sectors.
The second-quarter results for FY27, released earlier, show a tale of two metrics. The company achieved a 47% year-on-year revenue growth, reaching Rs 21,806 crore. This was largely driven by a strong performance in the mobile segment, where manufacturing volumes grew by 29% sequentially to 9.7 million units. However, the company’s net profit fell 48.7% to Rs 343.7 crore, largely due to a combination of margin compression and adjustments in fair value gains.
Understanding Margin Pressure
A key area for investors to monitor is the contraction in profit margins. EBITDA margins slipped to a range of 2.7% to 3.1% in the recent quarter. This decline is mainly attributed to two factors: the expiry of the government’s mobile PLI-1 incentive scheme and rising global prices for memory components, which have increased production costs. The market is assessing whether the company can maintain its profitability as it navigates these higher input costs.
Future Outlook and Risks
Despite the margin challenges, the management’s guidance remains focused on scale. Dixon Technologies has maintained its smartphone volume guidance for FY27 at 33–34 million units, a figure that excludes contributions from the new joint venture with Vivo. The company’s long-term growth strategy relies on successfully executing backward integration efforts and scaling its IT hardware and telecom divisions.
Investors should keep an eye on several risks that could impact these targets. Input cost volatility, particularly concerning global memory prices, remains a primary concern. Furthermore, any delays in the execution of new projects, such as the Vivo joint venture, or a sudden softening in smartphone demand could create pressure on both inventory levels and financial performance. The path forward for the company involves balancing high volume growth with the need to stabilize profit margins in a post-PLI incentive environment.