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This manufacturing company more than doubled investor wealth in the last year

This manufacturing company more than doubled investor wealth in the last year

This manufacturing company more than doubled investor wealth in the last year
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By Pranati Deva  Jul 2, 2020 1:58:33 PM IST (Published)

Dixon Technologies has more than doubled investor wealth in the last 1 year despite the coronavirus-led market sell-off and the Indo-China border tensions.

Dixon Technologies, an electronic manufacturing services company, has more than doubled investor wealth in the last year despite the coronavirus-led market sell-off and the Indo-China border tensions. The stock has risen as much a 153 percent in the last 1 year and nearly 50 percent in 2020 to date.

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The company's earnings for the quarter have also beaten estimates and delivered a good financial performance to become a favourable pick for the brokerages.
In the March quarter, the company's net profit jumped 66.84 percent to Rs 27.6 crore. This was led by a rise in margins as gross margins expanded by 336 bps to 15.8 percent.
However, the revenues were hit in this quarter due to the lockdown. Its revenue from operations was Rs 857.41 crore, down 0.16 percent as against Rs 858.82 crore in the year-ago quarter.
The company said that its consumer electronics segment saw a growth of 22 percent while other businesses like lightning products, mobile phones, and security systems saw revenue decline during the quarter.
For the financial year 2019-20, it's net profit rose 90.21 percent to Rs 120.50 crore. It was Rs 63.35 crore in the previous year. Its revenue from operations in FY20 also rose over 47 percent to Rs 4,400.12 crore.
Brokerages also expect double-digit returns, especially after this March quarter earnings.
"Dixon has multiple growth options, including upcoming opportunities in electronic manufacturing, all of which are not captured in near-term earnings in FY20-22E. Hence, we raise target price to Rs 6,100, and upgrade the stock to buy," said Dolat Capital said in a report.
While analysts at Emkay said that Dixon is expected to be a key beneficiary of the production-linked incentive scheme for mobile manufacturing. The scheme offers incentives to boost domestic manufacturing of mobiles.
“Dixon continues to add new customers in key product categories," it said.
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