Goldman Sachs Sees Export Headwinds For Industrials In Q2FY26; Cuts Dixon To ‘Sell’

Goldman Sachs has flagged early signs of export weakness emerging in Q2FY26, even as domestic demand, particularly in the Cables and Wires segment, continues to hold strong. The brokerage maintains a ‘Buy’ rating on KEI Industries Ltd., a ‘Sell’ on Dixon Technologies, and remains ‘Neutral’ on Polycab India Ltd.

"We think domestic demand remains strong for C&W. Copper and aluminum prices had seen some correction in first half of July, however since then, there was a steady increase in prices through the quarter which may have offset some de-stocking in July. However, after a strong Q1 and slowing exports, we expect some moderation in the growth rates seen in the previous quarter," the brokerage noted.

The brokerage has downgraded Dixon Technologies to ‘Sell’. The company had earlier guided for a 15% quarter-on-quarter growth in its mobile and EMS division for Q2. However, Goldman Sachs remains unconvinced. “We expect a 4% QoQ growth in mobile and EMS division versus 15% guided by the company for Q2”, the brokerage said.

During the April-June period, Dixon Technologies' topline or revenue from operations rose 24% to Rs 12,863 crore, compared to Rs 10,292 crore in the previous quarter ended March 31, 2025.

The company's revenue surpassed the Bloomberg estimate of Rs 12,155 crore. Ebitda came in at Rs 482 crore, significantly above the estimated Rs 389 crore, while operating margins stood at 3.8%, higher than the expected 3.2%. However, net profit declined 43% year-on-year to Rs 225 crore, in line with the Bloomberg estimate of Rs 221 crore, but down from ₹400.8 crore a year earlier.