Shares of Dixon Technologies Ltd. have surged more than 4% in trade on Friday after reporting its third-quarter earnings, where profit zoomed up to 68% on a year-on-year basis, even though operational numbers missed street expectations. The stock is currently trading at Rs 10,975, accounting for gains of 4.2% compared to Thursday's closing price of Rs 10,337.
Dixon Tech reported its Q3 earnings on Thursday. While profit saw an uptick, the firm's revenue largely remained flat, rising just 2.1% to Rs 10,672 crore compared to the previous year's Rs 10,454 crore. Its earnings before interest, taxes, depreciation and amortisation were up 6.1% at Rs 414 crore from the prior financial year's Rs 391 crore.
Dixon Technologies Q3 Results (YoY)
- Profit up 67.8% at Rs 287 crore vs Rs 171 crore
- Revenue up 2.1% at Rs 10,672 crore vs Rs 10,454 crore
- Ebitda up 6.1% at Rs 414 crore vs Rs 391 crore
- Margin at 3.9% Vs 3.7%
In light of its Q3 earnings, brokerages have put out cautious notes on Dixon Tech, with both Macquarie and Jefferies having issued a target price cut, citing the Q3 earnings as an operational miss while highlighting delays in the VIVO deal.
Macquarie, for its part, has maintained an 'outperform' rating on Dixon Tech but has cut the target price from Rs 18,000 to Rs 15,000, stating that the result missed as increased memory prices caused lower mobile volumes while the consumer durable segment was weak.
As for Jefferies, the brokerage firm has maintained a 'hold' call on Dixon Tech while cutting the target price from Rs 13,070 to Rs 11,350. It has labelled Dixon Tech's Q3 earnings as an operational miss, with sales growth deteriorating sharply while PAT was boosted by other income.
Shares of Dixon Tech have fallen as much as 26% on a year-on-year basis, with the stock currently trading with a relative strength index of 44, suggesting neutral market sentiment.
Out of 34 analysts tracking the company, 26 maintain a 'buy' rating, two recommend a 'hold,' and six suggest 'sell,' according to Bloomberg data. The average 12-month consensus price target implies an upside of 32%.
ALSO READ: Dixon Tech Q3 Result Review: Jefferies, Macquarie Cuts Target Price — Here's Why
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