Dixon Technologies Ltd. posted its fourth quarter results for the financial year 2026 on Tuesday, clocking its first net profit slump in 17 quarters.
The bottom-line slipped 36% to Rs 256 crore, from Rs 401 crore in quarter ended March 31, 2025. The decline, however, was still lower than the estimated fall of 54% to Rs 188 crore, as projected by the analysts tracked by Bloomberg.
Here's a look at the likely reasons behind Dixon trimming its profit for the first time in over four years.
To begin with, the year-ago period's profit for the electronic manufacturing services (EMS) segment had a gain of investments in Aditya Vision, valued at Rs 250 crore.
Since then, Dixon Tech has not only seen weaker mobile volumes but also higher raw material costs.
During the post earnings conference call, the company's management outlined that cost of raw materials like chips used to manufacture mobile phones has risen and, while there is no shortage of them as of now, the prices are inflated.
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Margins Under Strain?
The management said that the company will log a 12-15% on-year volume growth in the first quarter of FY27, and is targeting 56,000 crore revenue from mobile phone making in FY27. However, the road ahead has some hurdles.
For instance, India's smartphone production-linked incentive scheme (PLI) expired on March 31, 2026, and if there is no renewal of the scheme, the company's margins can be impacted adversely.
In its post-earnings concall for the third quarter of FY26, the company had emphasised on the significance of the scheme for its operations and said that it offered around 0.5-0.6% margin room for the mobile business.
"Assuming a case where it goes away… 0.5% of margins will get impacted in our mobile business," the management had remarked.
Dixon Tech Q4FY26 Results (Cons, YoY)
- Net Profit down 36% at Rs 256 crore vs Rs 401 crore
- Revenue up 2.1% at Rs 10,511 crore vs Rs 10,293 crore
- EBITDA down 7.8% at Rs 408 crore vs Rs 443 crore
- Ebitda margin at 3.9% vs 4.3%
Mcap Shrinks
Dixon Tech's shares have also taken a hit and fallen sharply — by 37% in the last 12 months, 12.8% in the last three months, and over 5% in this month alone.
The company's market capitalisation, assuming that the number of shares has remained the same, has contracted by over 30% over the past one year. Currently, it stands at around Rs 61,650 crore.
The scrip ended 5.9% lower at Rs 10,138 apiece on the NSE on Tuesday. This compared to a 1.83% decline in the benchmark Nifty index.
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