Having witnessed a major drawdown in its share price in the past 12 months, Dixon Technologies is gearing up for its next phase of growth and is particularly relying on two key catalysts: An imminent joint venture with smartphone giant Vivo and the government's highly anticipated PLI 2.0 scheme.
Speaking to NDTV Profit, Saurabh Gupta, Executive Director and Group CFO of Dixon Technologies, addressed the prolonged anticipation of the Vivo partnership while acknowledging that the final clearance is taking longer than what the company had hoped for. But he dismissed any structural roadblocks.
"We are deeply engaged with the government, all the related matters have been well settled and agreed upon, and my sense is it should come in soon," Gupta said.
The scale of the proposed JV promises a transformative leap for Dixon Technologies. Vivo currently commands a massive slice of the Indian smartphone market, moving up to 37 million units annually.
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"Our understanding with them is that under the JV that will be formed, almost 67% of their volume will be transferred to the JV," Gupta said. "On an annualised basis, we were looking at a volume of closer to 22 million units, with a much better selling price compared to our existing portfolio."
Gupta added that the partnership alone could add up to Rs 30,000 crore to Dixon Tech's topline, which will be fully reflected as soon as the next financial year.
Beyond the lucrative Vivo deal, Dixon is preparing for the sunset of the current Production-Linked Incentive (PLI) framework and the transition to PLI 2.0.
Gupta confirmed that the company is actively consulting with policymakers to shape the upcoming incentives. "We feel PLI 2 should be largely linked to exports and localisation," he noted.
While the company expects its base smartphone volumes to remain flat at 33 million units excluding Vivo, the upcoming incentive scheme could unlock immediate upside. "
As and when PLI 2 comes in, there can be an upside of 3 to 5 million additional volumes on the export side," he concluded.
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