Dixon Technologies shares plunged to a 10% lower circuit, dropping to Rs 15,804, following the company's disappointing Q3FY25 earnings report, which showed a 47.5% year-on-year drop in net profit and a 9% decrease in revenue. The Noida-based firm's net profit fell to Rs 216 crore from Rs 411.7 crore in Q3FY24, while quarterly revenue fell to Rs 10,453.7 crore. The company's stock has been on a downward trajectory, falling 12% year-to-date and underperforming against the Nifty 50 index, which declined by only 1.5% in the same period.
Despite the negative earnings results, some brokerages maintain 'Hold' ratings, citing Dixon's promising future prospects. Nuvama Institutional Equities, for instance, raised its target price for Dixon to Rs 18,790, recommending a 'Hold' rating, stating the company's execution and future potential. However, concerns regarding slower market growth, client relationship risks, and increasing competition have prompted some brokerages to issue cautious views.
Jefferies maintained an 'Underperform' rating and set a target price of Rs 12,600, citing a 32% decline in Dixon's sales from consumer electronics compared to last year. They noted that the stock's current valuation at 107x FY26 PE is stretched. Similarly, Goldman Sachs issued a 'Sell' rating with a price target of Rs 10,240, stating that the earnings upgrade cycle for Dixon may have paused, and with moderated growth and high valuations, the stock could face underperformance.
