Dixon Technologies India’s ₹1,500-1,800 Crore Investment Strategy

Dixon Technologies India, a prominent domestic electronics manufacturer, has announced ambitious plans to invest between ₹1,500-1,800 crore over the next three years.

Atul B. Lall, the company’s Vice Chairman and Managing Director, outlined its strategy to expand production capacity and bolster component manufacturing. Funding for this expansion will be sourced internally through cash flow, with an initial investment of ₹500 crore planned for this year alone. He also expressed openness to securing additional funds for significant acquisitions.

Dixon is further exploring opportunities in the electric vehicle sector, focusing on the production of electronic modules and components.

The Vice Chairman and Managing Director said, “Around one-third of the capex will be invested in backward integration of components. This fiscal itself, we will invest around ₹570 crore. We will not be shy of making investments since our balance sheet is very strong with no debt. The total primary equity raised was ₹60 crore that too during the IPO. The cash we generate is more than enough, but if required, it will also raise equity for any large ticket deals.”

He stated that about 60-65% of capex this year will be spent on mobile phone capacity expansion, ₹180-200 crore on display modules and the balance on other products. The company is also willing to venture into the non-consumer electronic manufacturing services business and is looking for land to set up a factory to manufacture electronic modules for electric vehicles.

According to Lall, this move towards backward integration into components aims to boost margins, strengthen capabilities, and foster stronger customer retention.

Earlier this month, Dixon Technologies finalised a term sheet with HKC Corporation to establish a joint venture focused on manufacturing components such as liquid crystal modules and TFT-LCD modules. The collaboration will also include assembling end products like smartphones, TVs, monitors, and automotive displays and selling HKC-branded products in India.

Dixon has established a production capacity of 45 million smartphones and 40 million feature phones, representing approximately 50% of the market potential in this sector. Additionally, it holds the largest television manufacturing capability in India and has developed the capacity to meet nearly 10% of the nation’s refrigerator demand. Dixon is also expanding into the manufacturing of laptops, tablets, and other IT hardware products.

On June 14, 2024, the share price of Dixon Technologies (India) Ltd opened at ₹10,959.00, touching the day’s high at ₹11,424.00, as of 10:11 AM on the NSE.

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