Dixon Technologies' revenue growth is getting a significant lift from rising memory chip prices, even as the number of smartphones and other electronic products it manufactures remains broadly unchanged. The increase in component costs is pushing up the selling prices of products handled by the company, creating a gap between reported revenue growth and underlying production volumes.
The development highlights how the global memory price surge, driven by demand from artificial intelligence infrastructure, is influencing the financial performance of electronics manufacturers. For Dixon, higher selling prices are translating into a larger revenue base, but not necessarily a comparable increase in manufacturing activity.
-
Indian Markets Turning Corner After Two Tough Years, Says Sandeep Tandon -
NDTV Profit Ignite 2026: Experts See Opportunity In Equities, Stay Bullish For Long-Term -
Buy Right, Sit Tight Does Not Work for Individual Stocks, Says Dinshaw Irani -
'Worst Is Behind': Quant MF Sees Market Bottom, Flags 'Extreme Euphoria' In Midcaps -
India's Mutual Fund Industry Could Become A $1 Trillion Opportunity, Say Fund Managers -
'Foreign Investors Are Baraatis': Raamdeo Agrawal's Take On LTCG Tax -
Stay Invested Through Market Cycles: Raamdeo Agrawal at NDTV Profit Ignite -
Ramesh Damani Remains Bullish On India For Next 20-30 Years, Sees Bargains Amid Market Weakness -
CAS Came After A Long Consultation Process: SEBI Chairman Tuhin Kanta Pandey AT NDTV PROFIT IGNITE -
Aim To Cut FPI Onboarding Time From Mth To Five Days: SEBI Chairman Tuhin Kanta Pandey AT NDTV PROFI
Dixon's consolidated revenue rose 47% year on year to Rs 21,806 crore in Q2 FY27. However, Group CFO Saurabh Gupta told analysts during the company's earnings call that mobile and IT hardware volumes were marginally lower year on year, while selling prices had increased sharply because of higher component costs.
“If you look at the volume growth, so year on year the volume has been slightly marginally lower. The reason the growth in mobile revenues are there or IT hardware revenues is there is basically because the selling prices have gone up,” Gupta said.
He added that memory prices had risen significantly and that the year-on-year increase in selling prices was around 35–40%.
Memory Costs Reshape Revenue
Memory chips, which earlier accounted for around 12–13% of a smartphone's bill of materials, now make up a significantly higher share as prices have climbed, Gupta said.
The increase has raised the value of components used in the devices Dixon manufactures. Since the company passes on these higher costs through selling prices, both revenue and material costs have risen.
Management said the increase in input costs had not disrupted production. Vice Chairman and Managing Director Atul Lal told analysts that the company was not facing supply constraints and that memory procurement remained comfortable.
Gupta also said the higher memory prices could persist for some time, citing commentary from global memory manufacturers.
The impact is also visible in margins. Dixon said its reported margin percentage was affected by higher memory prices and the expiry of the mobile PLI-1 scheme, particularly in its mobile and IT hardware businesses.
The distinction between price-led revenue growth and volume growth will remain important as investors assess the company's expansion. A moderation in memory prices could lower the value of products manufactured and reported revenue, even if production volumes continue to increase.
ALSO READ | Dixon Tech Q2: Net Profit Falls 49%, But Beats Estimates; Revenue Jumps 47%
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.