(Priyanka Gupta, Intern Journalist)Mumbai: The government has approved an application of Dixon Technologies for Production-Liked Incentive (PLI) for large-scale mobile manufacturing. The company has made a total of two applications. Due to this, there has been an uproar over the company’s shares. The company’s stock has risen by 192 percent in the last year. According to analysts, it is expected to increase by another 25 to 30 percent in the next year.
Analysts say that if the company’s second application of PLI is approved, then its stock can rise up to 60 percent in a year. YES, Securities analyst Himanshu Nair said, “With one license approved, the company’s revenue could be 700 crores in FY 2021 and 9000 crores in FY 2025. Earnings per share in FY 2023 due to the second license approval. It will increase by Rs 85. This will bring our target price to Rs 13,763. “
Dixon stocks have been the choice of analysts due to the government’s focus on Make in India. On Thursday, Dixon shares fell 2.41 percent to close at Rs 8,505. The stock is currently trading at 41 times its estimated FY2021 earnings. Nayyar said, “Looking at the track record of the company, we expect good growth in the company’s earnings. The Dixon is expected to compromise those MNCs that do not have a presence in India.”
According to the management of the Dixon, the company’s revenue limit to benefit the incentive is Rs 2000 crore in the first year. With an increase of Rs 2000 crore every year in revenue, the revenue will reach Rs 10,000 crore in the fifth year. The management of the Dixon hopes to reach the company’s proposed annual revenue limit. The company is negotiating with many customers for this.
Naval Seth, the analyst at Emkay Global, said, “Dixon is in talks with several brands to gain volume under the PLI scheme. The company will soon announce their names.” The annual compound growth rate (CAGR) of profit of the Dixon has been 57 percent and CAGR of sales 30 percent in the last five years. The average return on equity (ROE) of the company during this period has been 25 percent.
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