Dixon Technologies (India) Limited is a prominent electronics manufacturing services (EMS) firm in India, focusing on the design, production, and distribution of a wide array of electronic products. Founded in 1993, the company has transformed into a significant entity in India’s electronics landscape, serving both local and international markets.
Dixon functions as an Original Design Manufacturer (ODM) and a Contract Manufacturer (OEM) for many of the largest global brands, providing comprehensive solutions that encompass product design through to final assembly. The company is well-regarded for its robust execution skills, cost-effective operations, and extensive backward integration, making it a favored collaborator for global electronics companies.
In this article we will discuss the Q3 Earnings conference call summary of the company in detail. Let’s Begin:
Financial Performance
| Metric | Q3 FY25 | Q3 FY24 | Growth |
| Revenue | ₹10,461 crore | ₹4,821 crore | +117% YoY |
| EBITDA | ₹398 crore | ₹187 crore | +113% YoY |
| PAT (Net Profit) | ₹217 crore | ₹97 crore | +124% YoY |
Key Profitability & Balance Sheet Metrics
- ROCE (Return on Capital Employed): 42.6%
- ROE (Return on Equity): 33.3%
- Gross Debt-to-Equity Ratio: 0.15 (Low leverage)
- Cash & Cash Equivalents: ₹222 crore
- Negative Working Capital Cycle: -3 days (Cash Conversion Cycle)
Business Segments Performance & Expansion Plans
Mobile Phones
- revenue for the quarter from mobile was INR8,089 crores, a growth of 176% year-on-year.
- added one more new facility in Noida in addition to the 6 state-of-the-art manufacturing facilities now capable of producing over 60 million smartphones annually.
- Ismartu, subsidiary of Dixon Technologies, has acquired land building plant and machinery for INR133 crores to support scaling up of Nothing smartphone brands and brands like Infinix, Tecno and itel including the 3 million export volumes that have just been given to us to African markets next financial year.
- expect to export around 0.5 million to 0.6 million units in February, March this fiscal itself.
- For Motorola, company has been consistently clocking a volume of more than 1 million per month.
- witnessing a consistent increase in volumes of Xiaomi and expect this momentum to continue in the coming quarters.
- entered into a binding term sheet with Vivo for proposed joint venture with Dixon holding 51% of the shareholding for the manufacture of smartphones.
- have finalized location of manufacturing of displays in partnership with HKC. Company expect
to start the manufacturing by Q1 end or Q2 beginning of the next financial year.
Consumer Electronics (LED TVs and refrigerators)
- revenue for the quarter from this segment was INR633 crores, operating profit of INR22 crores and margin 3.5%.
- Out of 633 crores the revenue for the refrigerator business was INR166 crores.
- have onboarded a few multinational brands in our TV ODM solutions like Hisense and Acerpure on Google TV Linux platform.
- working closely with Amazon Fire TV solutions and LG for webOS, which is expected to be rolled out by Q1 of next fiscal.
- In addition to the interactive flat panel display, we have now started manufacturing digital signage solutions from 65 to 100 inches, in which company has a decent order book.
- plan to invest in CKD and planning to set up a robotic panel assembly line for these products.
- Refrigerators, within first year of operation, company has been able to capture around 8% of the Indian market in direct cool categories, also started exports to Nepal and actively exploring Sri Lanka and UAE markets.
- expanding capacity from 1.2 million per annum presently to 1.5 million per annum in refrigeration business. e going to be adding and expanding its product portfolio by including deep freezers, Visi Coolers, wine chillers and — along with 2-door frost-free and side-by-side in this particular category.
Home Appliances (Washing Machines)
- revenue for the quarter was INR315 crores, a
growth of 9% year-on-year.
- Operating profit was INR32 crores, a growth of 7% year-on-year
- Steady Growth: 25,000 units/month for Fully Automatic Top Load (FATL), up 100% YoY.
- now exploring addition of new product categories like robotic vacuum cleaners, water
purifiers, chimneys and other large kitchen appliances in this particular business.
Lighting
- revenue for the quarter was INR201 crores with an operating profit of INR14 crores.
- In the outdoor lighting range, company has received orders for flood lights and street lights from large brands.
- Backward integration of batten is expected to operationalize in Q4, financial year
’25, which will bring in more cost efficiency, leading to improved margins.
Telecom & Networking Products
- revenue in this segment for the quarter was INR977 crores, which is a growth of 48% quarter-on-quarter
- looking for more than 4x growth in revenues as compared to last fiscal.
- new Noida facility commenced production in November ’24 to meet the increased order book for an anchor customer
- company has also ramped up 5G FWA order — 5G FWA outdoor and indoor for domestic market and plan to double the capacity for the same to meet the customer requirements along with access points, GPON ONTs and Internet set-top boxes.
Laptops, Tablets & IT Hardware
- dedicated IT hardware product manufacturing unit in Chennai is almost ready for production and trials are going to be starting in February ’25 and mass production in Q1 of ’25-’26 for HP and ASUS.
- Mass production for Lenovo has already started along with Acer in our Noida unit.
- in final discussions of entering into a JV with a large global ODM and largest supplier to the global brand to expand our portfolio in high categories of notebook, servers and other IT products.
- Wearables and wearables revenue for this segment was INR129 crores for the quarter with healthy operating margin and good ROCE.
Question and Answer Session Highlights
on the smartphone side. So, we did see some ramp up in Q2, but I think Q2 and Q3 volumes are same. Could you give highlights?
I can tell you the total smartphone volumes for Q3 and 9 months excluding Samsung. So, in Q3, we did a volume of almost 8.3 million. In the first 9 months, we have done a volume of almost 21-odd million, 20.5 million. And Samsung is over and above this volume.
with the mobile phone PLI ending in FY ’26, which is the last year, and recently, Tata Electronics also came up with announcement regarding phone manufacturing. We have other players like BYD, ZETWERK’S, all wanting to enter phone manufacturing. So how Dixon is seeing the competition shaping up post the mobile phone PLI ending?
So, please appreciate that our business has grown from 5-odd million to almost 28 million to 30 million in the current fiscal. The order book that we have, and in the Android ecosystem, we have all the brands as a customer, top 8 brands as a customer.
And also, the order book we have, we feel that it should be enhancing to almost 40 million to 45 million and then going up to 60 million. That’s almost 65 % to 70% of the outsourcing opportunity in India.
Further, we are investing huge resources in automation, robotics and taking the efficiency level to the best in the world. Further, we are investing heavily into the component space, which, coupled with the PLI advantages is going to put us ahead we feel of the competition, so that’s where we stand.
on the KHY acquisition. In respect of that acquisition, you spoke about some export order. Could you just kind of explain how large is the opportunity? What are we looking for? Is it just capacity expansion that we were aiming in Ismartu facility, which is why we kind of acquired these assets?
in Ismartu, we’re going to be starting exports of smartphones. We are targeting to export almost 3 million phones. It’s a beginning, which is going to generate a revenue for us of almost INR1,500 crores to INR1,800 crores. The exports start from next month onwards.
So, we need to add capacity to existing Ismartu capacity. Also, please appreciate that there’s a migration from 4G to 5G phones, wherein the component count and the product configuration requires additional capacity. Then in Ismartu, we’ve also acquired a new customer, Nothing, which is the high-end phones, IP68 transparent enclosure, for which also we require this capacity.
So that’s the reason we are buying this asset. And it is coming to us at a very reasonable cost. The actual value of the asset is much higher. And there is more than adequate cash lying in the company and Ismartu to make this purchase. So that’s what this transaction is all about.
on the fab manufacturing facility. Just a couple of quarters back we had started — or we had started speaking about display modules and now we are speaking about complete fab. What has really changed? What kind of capex may be required for this facility?
So, I think the electronics manufacturing industry in India has reached a level of maturity as far as the device and product creation is concerned — manufacturing is concerned. And now for that to sustain and grow, definitely a component ecosystem is required.
And we had shared with the stakeholders that our first foray is into the non-semiconductor side, wherein we’ve already launched the display module, which is going to become operational in the next 2 to 3 quarters and also mechanicals and other modules.
Now we feel, and we’ve had active discussions with our potential partners, that India industry and Dixon should be looking at a fab for displays to actually create the moat for the industry. But everything has to align with the business case and financials. Also, we are awaiting the government guidelines for the ISM 2.0 for this fab.
The earlier ISM 2.0 guidelines were 50% capital subsidy from the center on a part and parcel basis. 20% from the pertinent state governments on a part and parcel basis. The number crunching, please be rest assured, I don’t want to share more details as of now.
It’s slightly premature. It’s an extremely attractive project with hugely margin accretive and a very fast payback period. And we are seeing that this will be globally competitive. A large part of it, it adds value to us through captive consumptions in mobiles, in televisions and in our notebooks business.
And of course, it’s going to be offered to the other players in the market. And also, it’s going to be globally competitive. So that’s the reason at a conceptual level, we are deeply diving into it and we are building a team to take it to the next level.
Any rough details that you can share about the kind of capex that would be required and the kind of bill of materials that we’ll be able to service through it?
So, the capex is to the tune of around $3 billion. And display in television is almost 60%. And mobile, it’s almost 12% to 15%. In a notebook, it’s again around 12% to 15%, so it varies, but it’s a high EBITDA margin business globally and for us also.
Now obviously, it’s dependent on the government scheme rollout. So, we are awaiting that, and we are expecting ISM 2.0 to be rolled out, but we are internally within Dixon putting in a lot of thought — a lot of working in pushing this product.