Dixon Technologies India Ltd. is back to being a high-growth stock for the next two years, according to JPMorgan, after the long-awaited approval for its joint venture with smartphone maker Vivo. The brokerage maintained its ‘Overweight' rating on Dixon and raised its target price to Rs 16,700 from Rs 14,300, implying an upside of nearly 39% from the stock's July 9 closing price of Rs 12,033.
JPMorgan said Dixon remains its top pick and sees further potential catalysts, including the announcement of a PLI 2.0 scheme. The brokerage also raised its earnings estimates sharply as the Vivo partnership is set to transform Dixon's mobile manufacturing volumes.
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JV Approval
The approval ends a 19-month wait for the companies. Dixon had signed an agreement with Vivo in December 2024 to form a joint venture for manufacturing electronic devices, including smartphones. Dixon will hold a 51% stake in the venture, while Vivo will own the remaining 49%.
JPMorgan expects the Vivo JV to add 11 million smartphones to Dixon's volumes in FY27 and 22 million each in FY28 and FY29. Vivo India sold around 32 million smartphones in calendar year 2025, of which about 67% — or roughly 22 million units — will now be manufactured by Dixon.
The higher volumes prompted JPMorgan to raise its revenue estimates by 24-39% over FY27-FY29 and its earnings per share estimates by 13-18%.
Dixon manufactured 32 million smartphones in FY26 and had earlier expected volumes to remain broadly flat in FY27, excluding Vivo. JPMorgan now expects the company to raise its FY27 mobile volume guidance to 43 million units from 32 million. The Vivo venture is expected to take 45-60 days to ramp up, which means Dixon could see about two quarters of positive contribution in the current financial year.
The brokerage expects Dixon's revenue growth to accelerate from 23% earlier to more than 50% in FY27, while its FY26-FY28 compound annual growth rate could rise from 22% to 44%.
The Vivo business, however, will come with lower margins. JPMorgan expects the ramp-up to dilute overall margins by 10-40 basis points over FY27-FY29. Still, the brokerage sees the partnership as return-accretive due to high asset turnover, estimating a 400-700 basis point boost to return on capital employed.
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