Summary
Dixon Technologies (India) Limited - Q3 FY 2026 Earnings Call Summary Thursday, January 29, 2026 4:00 PM
Event Participants
Executives 2 Atul Lall (MD & Vice Chairman), Saurabh Gupta (Director - Finance & Group CFO)
Analysts 9 Aditya Bhartia, Ankur Sharma, Bhavik Mehta, Chinmay Parab, Girish Achhipalia, Keyur Pandya, Nirransh Jain, Rahul Agarwal, Siddhartha Bera
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Operating Revenue | ₹10,678 crores | +2% YoY; impacted by a 7% decline in the Indian smartphone market and post-festive slowdown. |
| Operating EBITDA | ₹421 crores | +5.8% YoY; reflective of scale benefits despite commodity inflation. |
| Operating PAT | ₹214 crores | -1.4% YoY; margin pressure due to sharp global memory price increases. |
| Net Debt | ₹246 crores | Status: Low leverage maintained with a strong balance sheet. |
| Working Capital Cycle | -7 days | Flat; maintaining highly efficient cash conversion. |
| ROCE | 45.1% | Robust returns despite heavy capex cycle. |
| ROE | 32% | Remained stable YoY, demonstrating fundamental stability. |
Geographic & Segment Commentary
- Mobile & EMS: Revenue reached ₹9,750 crores with an operating profit of ₹1,050 crores. Segment faced headwinds from a 7% market contraction, elevated channel inventories, and high DRAM contract prices. Strategic focus remains on the upcoming 1 million sq. ft. Noida facility and the 74:26 JV for smartphones expected in Q2 FY27.
- Consumer Electronics: Revenue of ₹567 crores with ₹24 crores profit. Performance was impacted by post-Diwali seasonality; however, the company is gaining share in premium segments like Mini-LED TVs and high-end smart models.
- Home Appliances: Revenue of ₹355 crores at a 11.5% margin. Expanded into 16kg/18kg semi-automatic machines; front-loading washing machine mass production at Tirupati is scheduled for Q2 FY27.
- IT Hardware: Revenue of ₹1,500 crores (9M). Successfully stabilized production for HP and Asus; expansion includes a 60:40 JV with Inventec for SSDs and memory modules starting Q2 FY27.
- Telecom & Networking: Targeted revenue of ₹5,200 crores for the fiscal year. Commenced manufacturing complex backhaul microwave radios for a U.S. brand and selected as an ECMS beneficiary for optical transceivers.
Company-Specific & Strategic Commentary
- Backward Integration: Aggressive expansion into camera modules via Q Tech JV, aiming to increase volumes from 40 million to 190-200 million units per annum.
- Display Modules: 74:26 JV with HKC is nearing completion with a 24 million annual capacity for smartphones and 2 million for notebooks/automotive; trials start Q2 FY27.
- Component Diversification: Received ECMS beneficiary status for camera modules and optical transceivers; approvals for enclosures and display modules are expected shortly.
- Industrial EMS: Hired senior leadership to spearhead foray into Automotive and Industrial electronics, excluding energy meters for now.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| IT Hardware Revenue | ₹3,500 - ₹4,000 crores (FY27) | Based on strong order book visibility for laptops, desktops, and tablets. |
| Annual Capex | ₹1,100 - ₹1,200 crores (FY26) | Focused on display modules (₹1,100cr+), camera modules (₹300cr), and new facilities. |
| Mobile Volumes | 7 - 7.5 million units (Q4 FY26) | Near-term guidance tempered by memory supply squeeze and price volatility. |
| Revenue Target | ₹1,00,000 crores (3-4 years) | Management maintains long-term aggressive growth target despite supply disruptions. |
Risks & Constraints
| Risk | Context |
|---|---|
| Memory Inflation | Data center/AI demand is reallocating DRAM capacity away from consumer devices, causing a “supply squeeze” for smartphones and PCs. |
| Regulatory Approvals | Delays in PN3 approval for the Vivo JV and HKC JV could shift consolidation timelines, though management remains confident of imminent approval. |
| PLI Uncertainty | If the initial mobile PLI is not extended, Dixon faces a 50-60 bps margin headwind, which it plans to offset via backward integration by FY28. |
Q&A Highlights
Mobile Supply Chains & Memory Prices
- Question: How are OEMs reacting to high memory prices and what is the impact on Dixon? (Sameet Sinha)
- Answer: It is a pass-through business with no direct margin impact on an absolute basis, but high prices may hurt mass-market demand and unit volumes (Atul Lall).
Vivo JV Status
- Question: What is the cause of the delay in the Vivo JV and the “Plan B”? (Ankur Sharma/Saumil Mehta)
- Answer: We are in deep discussions and believe approval is close. There is no “Plan B” as we are confident in the transaction; closing will take 45-60 days post-approval (Atul Lall/Saurabh Gupta).
Margin Trajectory
- Question: How do margins look without PLI? (Sameet Sinha)
- Answer: Mobile margins should stay at 2.8%–3.2% without PLI. Once components (camera/display) are integrated over the next 6-8 months, we expect structural margin expansion across FY28 (Atul Lall).
Export Strategy
- Question: What is the roadmap for exports beyond Motorola? (Aditya Bhartia)
- Answer: Exports hit ~₹4,500 crores in 9M. We are building a large footprint in Tirupati for 2G/5G phones for a strategic partner and see huge potential in lighting exports to the EU/US (Atul Lall).
Key Takeaway
Dixon Technologies delivered a resilient Q3 FY26 with revenues of ₹10,678 crores, navigating a challenging 7% contraction in the Indian smartphone market. While near-term performance is pressured by global memory price inflation and a “supply squeeze” driven by AI demand, the company is aggressively pivoting toward a design-led component manufacturer. Strategic capital expenditure of ~₹1,200 crores is being deployed into high-margin backward integration, specifically in camera modules (targeting 200m units) and display JVs with HKC. Management remains firmly committed to a ₹1 lakh crore revenue target over the next 3-4 years, underpinned by a transition into IT hardware, servers, and industrial EMS. Despite regulatory wait times for the Vivo JV, Dixon’s negative working capital cycle and 45.1% ROCE provide the financial cushion to scale its integrated electronics ecosystem as component manufacturing begins mass production in mid-2026.
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