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Shares of Dixon Technologies have witnessed a stellar run in the past one year. The scrip has soared over 7 times, or 641%, to hit its all-time high of Rs 21,500 on March 15 from its 52-week low of around Rs 2,899.95, scaled on March 24 last year.

The rise in share price indicates that an investment of Rs 25,000 in a company in March last year is now worth Rs 1,85,348.

However, market watchers are cautious on the counters considering expensive valuations. AK Prabhakar, Head of Research, IDBI Capital market said, “This is highly hyped stock. I will not buy it considering expensive valuations.”

“Sentiment is in favour of Dixon Technologies and things like Make in India, anti China stuff are working for the company. It is very difficult to predict the share price movement considering robust liquidity in the counter,” said independent market expert Ambareesh Baliga.

The board of Dixon Technologies in February approved a stock split under which the company will issue five shares for each one held. The record date for the purpose of the split has been set as March 19, 2021.

At present, shares of the company are trading at a price-to-earnings ratio of 175 times against the average of 67 times since listing in September 2017.

The company commenced manufacturing consumer electronics such as colour TVs in 1994. Over time, it has diversified into manufacturing LED TVs, LED lighting products, security systems, set-top boxes and washing machines.

It commenced production of mobiles through a joint venture in 2016 but aspires to emerge as a top domestic manufacturer of smartphones.

The company intends to increase capacities for all product categories and has planned an annual capex of Rs 150 crore for FY22 and FY23. It is operating at peak capacity utilisation and has planned around Rs 130 crore capex in FY21.

Of late, the company reported its highest-ever quarterly revenue of Rs 2,180 crore in Q3FY21, up 120% year on year (YoY) on the back of improved consumer sentiment, festive season sales and strong order book. On the other hand, it posted a 134% YoY growth in net profit at Rs 61.59 crore during the quarter under review.

Commenting on the growth going ahead, Mayuresh Joshi, Head of Research- Equity, William O’Neil India said, “The company caters to various industries. Besides, strong order book, robust clientele, PLI scheme and robust balance sheet are among the factors which may support the bottom line of the company going ahead.”

While sharing the plans, Atul Lall, Managing Director, Dixon Technologies told IILF Securities that Dixon is foraying in ODM (original design manufacturing) solutions for direct cool refrigerators (H2FY23) with a greenfield capacity,
and targets adding Rs 500-600 crore revenues per annum.

At present, the company makes popular electronic products like television, setup box, washing machine for the brand owners like Samsung, Toshiba, Nokia, LG and Reliance Jio and many more to name a few. In the lighting segment, Dixon has players like Havells and HPL, together as the major brands in its portfolio.