₹ 1,08,963 Cr. Market capitalization: This company has multiplied investors’ wealth – 1 lakhs invested would have grown to 9.7 lakhs in 5 years

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ABOUT THE COMPANY

DIXON TECHNOLOGIES (INDIA) LTD is a leading Indian electronics manufacturing company (EMS) company. With 17 manufacturing units spread across the country it serves top global brands such as Samsung, Xiaomi, Panasonic, and Philips. The company has shifted its operations mainly towards the mobile/EMS segment, which has become the dominant revenue driver. With a market capitalization of ₹ 1,08,963 Crores, the company has a Return on Equity of 32.8%. Based on recent revenues, its annual order size exceeds ₹176,909 crore, reflecting high business volume and a solid order pipeline. The company has a P/E ratio of 127x which is above the industry median of 68x. Considering the P/E ratio the company is overvalued compared to its competitors, but the order size indicates a sharp growth in future sales.

Analysis of the Financial Statements

Revenue Growth Trend

Revenue moved from 4,400 crores in 2020 to 38,860 crores in 2025 with a CAGR for revenues stands at 45%, while its competing company Havells India has a 5-year CAGR of 14-17%. CAGR rate can be a good sign for the retail investors, indicating that the company is ahead of its competitors and robust order book indicates the same in the future. 

March
2020		March
2021		March
2022		March
2023		March
2024		March
2025
4,400 CRORES6,448 CRORES10,697 CRORES12,192 CRORES17,691 CRORES38,860 CRORES

Profitability & Margin Analysis

Operating profits of the company have been constant across the years i.e. 4-5% in the past 5 years while the industry average being 5-10%. This is a sign that the management is focused on cost efficiency and increasing the profit, which would help company to scale profit faster when the sales increase as the fixed cost burden is already minimized. Supported by its robust order book the company could generate a good amount of profits in the future.

March
2020		March
2021		March
2022		March
2023		March
2024		March
2025
5%5%4%4%4%4%

Balance Sheet Strength

The total assets of the company have grown from 1,697 crores in March 2020 to 16,758 crores in March 2025 showing subsequent capital investment. This subsequent growth shows company ability to support expanded operations. This asset appreciation plus cutting operational costs can build a solid foundation for future earnings growth, provided execution stays on track. The question for the investors would be whether the expanded assets base delivers higher return on capital employed (ROCE) and margin improvement in coming years.

Debt Profile

Borrowings of the company have also grown from 87 crores in 2020 to 671 crores in 2025 which is not alarming yet but do highlight that the growth is debt funded. Reserves showed a sharp increase from 530 crores to 2,998 crores, indicating a large portion of the assets are financed through retained earnings and not only through debt. This makes the balance sheet healthier than if it was purely debt-driven. This conservative approach of the company may cap the aggressive growth opportunity compared to the leveraged peers.

Cash Flow Health

Operating cash flow of the company has been increasing sharply, i.e. 237 crores in March 2020 to 1,150 in March 2025, which shows that the company is easily able to convert its profit into cash. Cash Conversion Cycle of the company has been negative in the past years, indicating company is able to collect cash from its customers before settling dues of its supplier, strengthening liquidity and reducing reliance on debt. The ultimate test of the company will be maintaining its current Return on Capital Employed which is 40% for the financial year 24-25.

Analysis of the Company Management (Investors presentation/Disclosures-based view)

Recent conference calls highlighted:

  • Management is focused on increasing the capacity and setting up new facilities to meet the future targets.
  • Management is constantly evaluating for new business ventures, such as application for high potential segments like display modules and precision components.
  • Management credibility screens strong given multi-year delivery on growth and profitability without leverage.
  • Promoters holding in the company has gone down to 28.95% while 36.17% in March 2020 but on the other end FII’s holding in the company has gone up to 20.55% which was 10.76% in March 2020 this substantial increase across the years shows the FII’s confidence in the company.

Disclaimer: The article is for informational purposes only and not investment advice. 

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