Dixon Technologies expects its annual revenue to be 70-80 percent more than what it is now, by 2027. Chief Executive Officer (CEO) told CNBC-TV18 that it will be well over Rs 20,000 crore as business recovers after a disappointing end to 2022.

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Shares of Dixon technologies were trading at Rs 2,928, up 0.65 percent from the previous close on the BSE. The shares have lost nearly a quarter of their value this year so far. Bulk of the fall in Dixon share price came in January 2023, when it reported a 21.75 percent fall in sales, which stood at Rs 2,404 crore.

However, today (May 12) the CEO said that the growth rates will return to the trend seen in the last five years, which, according to him, was a compounded annual rate of 13 percent.

In the quarter ending December 2022, the Noida, Uttar Pradesh-based maker of a whole host of products from LED bulbs to television sets and mobile phones clocked a 12 percent growth in profit, which came in at Rs 51.9 crore. This was less than what analysts had estimated i.e. of Rs 73.9 crore (according to a CNBC-TV18 poll).

Lall also mentioned about the company's outstanding performance “In our last five years journey, we have grown 4.5 times in our revenues and 4.3 times in our profitability." he said.

Lall further added that the company has experienced substantial expansion in terms of human resources and business ventures, with a fourfold increase in the number of employees and a twofold growth in the number of businesses operated. This expansion showcases Dixon Technologies' commitment to strengthening its position in the market and providing valuable opportunities for employment.

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Regarding the future prospects of the company, Lall mentioned the company is on an aggressive growth path, stating, "We are closing on some of the large contracts in the very near future."

"The growth is going to be decent and much ahead of what industry growth is," he added.

Margins expected to be in the range of 4-4.5%

The company has had a compound annual growth rate (CAGR) of approximately 38 percent in revenue over the past five years. Lall also provided insights into the company's targeted margins, stating that they are expected to be in the range of 4 to 4.5 percent.

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He attributed this margin range to the fact that the majority of the company's growth is derived from the mobile business, which operates on relatively low margins. However,

What’s aiding the company?

Lall mentioned that the mobile and home appliance sectors have shown significant growth for Dixon Technologies, with robust order books and increased production capacities.

He also mentioned the booming demand for wearables and hearables, for which Dixon Technologies has expanded its production capacity to meet the growing market needs. However, the lighting and television businesses have experienced relatively slower growth rates, he added.

“Lightings would be around 70 percent. Television is a seasonal business; the production requirements are mainly around the festive period. So, it's around 60-65 percent.” he said.

In terms of financial outlook, Lall stated that Dixon Technologies anticipates an annual capital expenditure (capex) of approximately Rs 400 crore. Despite the capital-intensive nature of the company's growth, he expressed confidence in the generation of cash flows after accounting for capex on a yearly basis.

Also read: Dixon Technologies to receive Rs 150 crore as government clears another tranche of the PLI Scheme

First Published:May 12, 2023 10:08 AM IST