Dixon Tech Plunges to 18-Month Low, Market Cap Below ₹70,000 Crore
Overview
Dixon Technologies shares hit an 18-month low, dropping over 5% and falling below ₹70,000 crore in market capitalization. The decline extends a trend amid concerns over memory price surges, delayed JV approvals, and mobile PLI expiry. HSBC maintained a 'buy' rating but slashed its price target, anticipating a subdued Q3.
Stocks Mentioned
Sharp Sell-off Continues
Dixon Technologies shares plunged Tuesday, January 13, 2024, to their lowest level in 18 months, pushing the company's market capitalization below the ₹70,000 crore mark. The electronics manufacturer's stock fell more than 5% in intraday trading, extending losses for a third consecutive session and marking a significant downturn from its recent 52-week high of ₹18,471. The stock has declined in six of the nine trading sessions so far this year.
Analyst Concerns Weigh on Stock
The sharp decline is attributed to several headwinds identified by market analysts. HSBC, while maintaining a 'buy' rating, significantly revised its price target downwards to ₹15,500 from ₹19,600. The brokerage cited concerns over a surge in memory prices, delays in joint venture approvals, and the impending expiry of the mobile Production Linked Incentive (PLI) scheme as factors weighing on the company's near-term performance. HSBC anticipates a subdued third quarter for Dixon Technologies, leading it to cut earnings estimates for FY2026-2028 by 3% to 5% and adjust its target price-to-earnings multiple to 50 times.
Mixed Views Emerge
Despite these headwinds, some analysts remain bullish on Dixon Technologies. Investec, for instance, maintained its optimistic stance with a price target of ₹18,900, according to a note released Tuesday. Overall, market sentiment appears divided. Out of 35 analysts covering Dixon Technologies, a majority of 27 recommend a 'buy', while two suggest 'hold', and six advise 'sell'.
