Buy Dixon Technologies (India), target price Rs 4500: JM Financial

JM Financial has buy call on Dixon Technologies (India) with a target price of Rs 4500. The current market price of Dixon Technologies (India) is Rs 3618. Time period given by analyst is one year when Dixon Technologies (India) Ltd. price can reach defined target.

Dixon Technologies (India) Ltd., incorporated in the year 1993, is a Mid Cap company (having a market cap of Rs 21777.60 Crore) operating in Consumer Durables sector.

Dixon Technologies (India) Ltd. key Products/Revenue Segments include Domestic Appliances, Job Work, Rent, Service Charges, Export Incentives for the year ending 31-Mar-2021.



Financials
For the quarter ended 30-06-2022, the company reported a Consolidated Total Income of Rs 2855.49 Crore, down -3.35 % from last quarter Total Income of Rs 2954.57 Crore and up 52.89 % from last year same quarter Total Income of Rs 1867.67 Crore. Company reported net profit after tax of Rs 45.51 Crore in latest quarter.

Investment Rationale
The brokerage cuts EPS estimates for FY23 and FY24 by 20% and 14% respectively, to factor in increased competitive intensity, fading impact of high cost inventory and higher interest cost. It forecasts sales/EPS CAGR of 31%/46% over FY22-25E and maintain BUY as we roll forward to Sep’23 TP of INR4,500, valuing the stock at 50x Sep’24E EPS. Key risk: loss in key customer’s market share.

Promoter/FII Holdings
Promoters held 34.3 per cent stake in the company as of 30-Jun-2022, while FIIs owned 15.08 per cent, DIIs 8.07 per cent.