Dixon Technologies shares tank 14% despite solid Q3 numbers; here is what is worrying some analysts

While prima facie, the consolidated numbers look good, the company's segments' performance needs to be studied closely.

The company, as per its earnings release, reported a revenue of ₹10,461 crore during the quarter under review, up 117% year-on-year (YoY).

Its EBITDA, or earnings before interest, taxes, depreciation, and amortisation, came in at ₹398 crore against ₹187 crore logged in the year-ago period. The figure grew 113% YoY.

However, its EBITDA margin slipped 10 basis points (bps) YoY to 3.8%.

Its profit after tax (PAT) stood at ₹217 crore, up 124% YoY, while PAT margin grew 10 bps to 2.1%.

Segment-wise performance

Dixon Technologies' Mobile & EMS Division revenue came in at ₹9,305 crore. This was a bit lower than ₹9,444 crore logged in the September quarter. It posted ₹3,214 crore revenue in the December quarter of the previous fiscal year.

On a YoY basis, revenue grew 190%, but QoQ slipped 1%.

Further, operating profit for the vertical jumped 210% YoY and 5% QoQ to ₹322 crore. The company had logged an operating profit of ₹308 crore in the September quarter and ₹104 crore in the year-ago period.

Consumer Electronics & Appliances (LED TV & Refrigerator)

Revenue for the vertical came in at ₹633 crore, down from ₹1,413 crore in the September 2024 quarter and ₹929 crore crore logged in the year-ago quarter.

The figure dropped 32% QoQ and 55% YoY.

Its operating profit, too, fell 58% QoQ and 31% YoY to ₹22 crore.

Home Appliances and Lighting Products segments saw growth in revenue and operating profit on a YoY basis.

Global brokerage Goldman Sachs said the Q3 numbers were below its estimates as PAT growth lagged revenue growth despite margins getting positive support from forex.

Further, it added that the company's mobile business growth is peaking. The brokerage remains concerned about the stock's valuation.

Dixon Technologies (India) share price

In December 2024, Dixon Technologies said that its wholly owned subsidiary Dixon Electro Manufacturing entered into an MOU with Cellecor to manufacture refrigerators and their related components for Cellecor.

"Cellecor is a leading name in the consumer electronics industry, known for its innovative and cutting-edge technology. With a commitment to making happiness affordable, Cellecor offers a diverse range of products encompassing mobile phones, smart TVs, soundbars, smartwatches, kitchen appliances, and home appliances like washing machines, air conditioners, refrigerators, air coolers, geysers, heaters, & many more products," the company said in its press release.

Earlier in December, Dixon Technologies announced a partnership with Chinese mobile firm Vivo. The electronics contract manufacturer and Chinese mobile phone company Vivo will set up a joint venture for the manufacturing of electronic devices, including smartphones.

Dixon will hold a majority stake of 51% in the joint venture, and the rest will be held by Vivo India.