Shares of Dixon Technologies Ltd. rose over 2% in Wednesday’s trade, day after the company said it has signed a share purchase agreement with Ismartu In Pte. Ltd., to acquire up to 56% equity stake in the latter in two tranches. At 11:46 am, the scrip was trading 1.68% higher at ₹7,821.80 per share.
Following the development, Kotak Institutional Equities in a report said Dixon’s acquisition of Ismartu at an attractive valuation of 10 times its financial year 2026 earnings estimate will help the company further expand its market share in the domestic smartphone market.
The domestic brokerage firm also said that Dixon’s recent tie-ups with Ismartu and Compal have the potential to increase the exports share over the medium term. “Beyond India, we see global export markets as an additional opportunity for Dixon through this partnership.”
During the quarter, Dixon Technologies has also agreed to undertake the manufacturing of mobile phones for Compal and its designated customers for the Indian market, with potential to cater to the export market over the medium term.
Kotak noted that Dixon’s potential tie-up with BBK Group remains the next big catalyst for the company.
“With BBK Group looking to tie up with contract manufacturers, a similar tie-up could be the next big catalyst for Dixon’s mobile segment,” the brokerage said while increasing its price target by 13% to ₹5,200 per share.
However, Kotak has retained a ‘Sell’ rating, saying its price target reasonably captures Dixon’s transition to new EMS segments, components and exports.
The brokerage has lowered its financial year 2024 earnings estimate by 8%. But it has raised its current financial year (FY25) earnings estimates by 9% and financial year 2026 (FY26) earnings estimates by 6%, owing to an expected ramp-up in the mobile segment, driven by the Ismartu acquisition.
Shares of Dixon Technologies are trading 1.72% higher at ₹7,824.60. The stock has risen over 160% over the last 12 months.
