Dixon Technologies (India) Ltd.'s annual turnover from its IT hardware segment, including laptops and personal computers, may rise to the range of Rs 3,000–4,000 crore over the next two years, its Chief Financial Officer Saurabh Gupta said.
The comments come after the Union government imposed import restrictions on laptops, tablets, all-in-one PCs, ultra-small-form factor computers and servers, with effect from Oct. 31. The restrictions are an attempt to boost manufacturing capabilities and activities in India, and cut imports from countries like China.
"It will go a long way in boosting the local production and eventually making India a global manufacturing hub in this particular category as well," Gupta told BQ Prime in an interview. "India is also a large market and a significant portion of it is getting serviced through imports. So, it is a big substitution play as well."
CFO Saurabh Gupta. (Source: Dixon Technologies India website)
IT Hardware
Dixon's information technology hardware segment contributed less than 5% to its top-line in the first quarter of fiscal 2024. However, Gupta said the electronic manufacturing firm will be a large beneficiary of the segment and expects the current $9-billion market to grow to a $13-14 billion market in the next few years.
Gupta said the company was in talks with large global players for future orders. Currently, Dixon manufactures IT hardware mainly for Acer and expects volume to grow from their anchor customer.
Capacity Expansion Plans
Dixon aims to reach an aggregate facility space of 4.5 million square feet in the next 12-15 months. From the IT hardware perspective, the company is looking to add capacities in the northern and southern parts of India in the next 5-6 months, according to Gupta.
The company would work out its volume and infrastructure numbers in the next four months in order to gain earnings visibility for the segment, he said.
The CFO expects revenue inflow from prospective customers by the fourth quarter and "meaningful revenues" from the category in the next fiscal.
Localisation Of Components
Dixon is currently a beneficiary of the production-linked incentive scheme for large-scale electronics production, Gupta said. The firm is also looking at spending capital expenditure on backward integration in its IT hardware and mobile phone verticals.
Currently, 50% of the lighting segment and 60% of the washing machine segment have value additions made in India. On the mobile phone front, the level is only 20%, but it can potentially go up to 30–32% with an increase in scale and capacities, according to Gupta.
The company's dependency on imports gets diluted every year and in the next two–three years, Dixon will have a well-built component ecosystem in India, he said.
Watch The Full Interview Here:
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