Dixon Technologies' Lighting Revenue To Grow 2.5 Times With Signify JV, Says CFO Gupta

Dixon Technologies' joint venture with Netherlands-based lighting giant Signify is set to propel its lighting segment revenue to Rs 2,000 crore from Rs 800 crore, within the next couple of years, according to the company's Chief Financial Officer, Saurabh Gupta.

“This JV becomes an extended manufacturing arm for Signify. Initially, we will focus on the consumer lighting business and then expand into professional lighting. Given global geopolitical tailwinds, we see strong export potential in the next couple of years,” Gupta told NDTV Profit.

“While the JV will primarily cater to Signify customers, we will continue manufacturing for other clients as well. Signify, as a leader in lighting technologies, enhances our operating leverage and brings cost efficiencies. In the next couple of years, this JV can drive our lighting business revenue to Rs 2,000 crore from the current Rs 800 crore,” he added.

As part of the agreement, both Dixon and Signify will hold a 50% stake in the JV entity, though neither will own a stake in the other. Gupta highlighted that this collaboration would realign India's lighting manufacturing landscape, improving efficiencies and scale.

Dixon Technologies has sufficient infrastructure in place to support the JV's manufacturing operations, the top executive emphasised.

“We already have a footprint in Dehradun, and Signify has a presence in West India. We have ample space and scope for capacity utilisation in both locations. We are also beneficiaries of the PLI (Production-Linked Incentive) scheme under the lighting components segment, where we have committed Rs 100 crore in investments—Rs 60 crore has already been deployed, and the remaining Rs 40 crore will now come through this JV. I believe our existing infrastructure is well-equipped to support this growth from Rs 800 crore to Rs 2,000 crore or beyond,” Gupta explained.

He also emphasised the margin expansion potential from the PLI scheme for electronic components, which will deepen Dixon's manufacturing capabilities.

“Our mobile margin, currently around 3.3% to 3.4%, could rise to 4.4% to 4.5% in the next couple of years due to backward integration. IT hardware margins will initially start below 3%, but with further integration, they could reach 4.5% to 5%.

Since mobile and IT hardware contribute nearly 75% to 80% of the company's revenues, this expansion will positively impact overall margins, he said.

"We expect company-wide margins to improve from 3.7% to approximately 4.5% to 4.6% over the next few years on a significantly higher turnover base,” Gupta stated.

Shares of Dixon Technologies (India) Ltd. were trading 1.30% higher at Rs 13,091.90 on the NSE as of 10:09 a.m., compared to a 0.27% advance in the Nifty 50.