Shares of Dixon Technologies (India) slumped over 6 percent on Wednesday after Morgan Stanley slashed its target price on the company’s stock to Rs 2,634 from Rs 2,879. The foreign brokerage firm has concerns about the company’s growth prospects.

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At 12:48 IST, shares of the company were trading 3.1 percent lower at Rs 3,353.2 on the BSE.

Year-to-date, the stock is down close to 40 percent as compared to Nifty500's 13 percent fall. In the past three years, the stock skyrocketed by over 650 percent.

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Morgan Stanley has an ‘underweight’ rating on shares of Dixon Technologies. The brokerage has cut its earnings estimates for the electronics manufacturing services company by 2-5 percent over FY23-26.

According to the brokerage, multiple risks are being ignored, including competition, margin, and return on equity contraction. Additionally, rising commodity prices pose a risk to the margin of the original design manufacturing business, it said.

In June, Credit Suisse had upgraded Dixon Technologies' shares to 'outperform' from 'neutral', with a target price of Rs 4,800, on the back of a sharp correction in the stock price. The brokerage firm likes the company's strong alignment with the government's 'Make in India' drive. particularly, in the electronics sector.

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