Dixon Tech Shares Fall, But JP Morgan Remains Bullish — Here's Why

Dixon Technologies Ltd. has been one of the key victims of the broad-based correction within the Electronics Manufacturing Services (EMS) space over the course of the last six months. Even on Monday, the stock has fallen, as part of the wider pressure on Indian markets due to the ongoing geopolitical tensions.

However, even at a time when the stock has corrected over 40% in the last six months, JPMorgan has come out with a note on the EMS major, maintaining a bullish call on the counter while keeping the target price of Rs 13,700 unchanged.

The brokerage firm points out that the mobile PLI scheme, which was ignored in the Budget 2026 speech, could appear a bit different from the existing scheme. There could be more focus on local value addition, such as component manufacturing, while exports could be a key focus area as well.

JPMorgan believes the market has already been assuming that the PLI scheme would not be extended, meaning any downside risk for the stock relating to the PLI scheme is no longer present. This does mean Dixon's mobile business could see a 50 basis point margin reduction, starting from FY27.

What is important to note is that if the PLI scheme were to be extended, Dixon Tech could continue to enjoy a 50 basis point margin benefit, which in turn, could lead to 12-16% earnings per share over FY27 to FY28. 

Shares of Dixon Tech are currently trading at Rs 10,425, representing a fall of more than a 1%. The stock is also trading with a relative strength index of 60, which suggests neutral market sentiment. This is despite the fact that the stock has major correction over the past six months. 

ALSO READ: Tough Times Ahead For Dixon Tech After Budget 2026? Brokerages Say Yes; Pick Other EMS Stocks

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