Stock Of The Day: This Electronics Maker's Near 200% Rally Gains More Momentum | Key Technicals

Shares of Dixon Technologies (India) Ltd. continue to take support from bulls on Dalal Street amid operational expansions and strong revenue expectations.

Dixon's stock rose as much as 4.3% during the day to a life high of Rs 18,735 apiece on the NSE. The scrip of the electronics manufacturer shrugged off the selloff by foreign investors last month in the broader market, trigging nearly a 200% surge this year.

The stock continues its 11-month surge, having risen by over 18% in December so far. On a daily time frame, the stock nears its immediate resistance of Rs 18,800 level, which is a 2-standard deviation above the 14-day moving average. A breakout of this level could push the stock to the psychological resistance at the Rs 19,000 level.

The stock could find support near Friday's close of Rs 18,000. The candle trades comfortably above the 14-day simple moving average and 21-day exponential moving average. The momentum of the stock seen in the Heikin Ashi candle shows bulls are in charge.

It has risen 198% during the last 12 months and has declined by 184% on a year-to-date basis. The total traded volume so far in the day stood at 2.6 times its 30-day average. The relative strength index has remained above the overbought zone of 80 since the beginning of December.

Fifteen out of the 31 analysts tracking the company have a 'buy' rating on the stock, seven suggest a 'hold' and nine have a 'sell', according to Bloomberg data. The average of 12-month analyst price targets implies a potential downside of 20%.

The company's management expects its revenues to grow by up to 40% on an annual basis over the next three to four years on the back of new opportunities from mobiles, IT and telecom product segments.

The company has grown from around Rs 2,000 crore five years back to a point where it may close FY25 with a topline of Rs 38,000-Rs 40,000 crore, Chief Financial Officer Saurabh Gupta told NDTV profit earlier.

The top executive also talked about the large smartphone and feature phone market in India, giving an idea about the company’s order book. He revealed that the total market was around 220 million units, out of which the smartphone market was 150 million, and the remaining 70 million was for feature phones.

Earlier this month, the company's wholly owned subsidiary signed a contract with the manufacturer that makes Google Pixel. This was after it announced to start mass production of Pixel smartphones in its Noida plant along with Google's Taiwanese contract manufacturer Compal Electronics.

Dixon's consolidated net profit jumped over 3.5 times to Rs 412 crore in the second quarter of the current financial year from Rs 113 crore in the corresponding quarter of the previous fiscal. Revenue from operations more than doubled to Rs 11,534 crore.