Dixon Technologies, Supreme Industries, Karur Vysya Bank, Can Fin Homes Q3 Results Review  — HDFC Securities

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HDFC Securities Institutional Equities

Dixon Technologies - Diving deep into the component value chain

Dixon Technologies India Ltd. reported yet another quarter of strong operational performance with revenue/Ebitda growing by 117%/112% (+7%/+8% versus our estimate), led by 2.9x growth in the mobile and EMS division revenues (ramp in volumes with existing customers and consolidation of the Ismartu acquisition). Having achieved 21 million smartphones in 9M, Dixon remains on track to close the year with 30 million units.

Commercialization of the display module facility remains on track to go online in H1 FY26 while it continues to look to further deepen backward integration capabilities through partnerships for precision components, mechanicals, camera modules, and battery packs.

Moreover, Dixon is exploring setting up a display fab ($3 billion capex) and is awaiting ISM 2.0 scheme contours. Dixon expects all these backward integration initiatives to be margin accretive and enhance customer stickiness.

We value the stock at 60 times Mar’27 earnings to arrive at a target price of Rs 15,000. Although we continue to appreciate Dixon’s execution capabilities, current valuations at 70x FY27 earnings per share leave no room for error. Maintain Reduce.

Supreme Industries - Pipes margin disappoints; outlook healthy

We maintain Add with a lower SOTP target price of Rs 4,410/share. Supreme Industries delivered muted 3% volume growth YoY owing to weak industry demand (pipes/ other segments 4/1% YoY). Revenue grew 3% YoY (volume-led). Ebitda declined 19% YoY due to an ~Rs 0.6 billion inventory loss. Ebitda, adjusted for inventory loss, declined ~5% YoY. Adjusted profit after tax declined 27% YoY, given the weak Ebitda and lower other income.

The company has revised its FY25 guidance downward, projecting lower volume growth and margins. Supreme Industries plans to increase capacity by ~30% in FY25 and FY26 to ~1.25 million metric tonne (pipes 1 mnmt capacity).

We expect the company’s volume growth to pick up in upcoming quarters, aided by demand revival and normalisation of channel inventory.

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