{"id":155363,"date":"2023-10-26T11:08:11","date_gmt":"2023-10-26T15:08:11","guid":{"rendered":"https:\/\/44.250.171.167\/?p=155363"},"modified":"2023-10-26T11:08:13","modified_gmt":"2023-10-26T15:08:13","slug":"dixon-technologies-india-ltd-q2-fy24-earnings-conference-call-insights","status":"publish","type":"post","link":"https:\/\/alphastreet.com\/india\/dixon-technologies-india-ltd-q2-fy24-earnings-conference-call-insights\/","title":{"rendered":"Dixon Technologies India Ltd Q2 FY24 Earnings Conference Call Insights"},"content":{"rendered":"<p><strong>Key highlights from Dixon Technologies India Ltd (DIXON) Q2 FY24 Earnings Concall<\/strong><\/p>\n<ul>\n<li><strong>Financial Performance<\/strong>\n<ul>\n<li>Consolidated revenues grew 28% year-over-year to INR4,943 crores in Q2 FY24.<\/li>\n<li>Consolidated EBITDA grew 37% to INR200 crores and PAT grew 47% to INR113 crores in Q2 FY24.<\/li>\n<li>Expanded ROC to 32.9% and ROE to 24.4% as of Sept 2023 through earnings improvement and working capital management.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Business Segment Growth<\/strong>\n<ul>\n<li>Consumer electronics revenues were down 4% YoY to INR1,440 crores.<\/li>\n<li>Mobile &amp; EMS revenues grew 77% YoY to INR2,819 crores driven by orders from Jio, Motorola, Nokia.<\/li>\n<li>Home appliances revenues grew to INR364 crores through new products and backward integration.<\/li>\n<li>Wearables revenues strong at INR385 crores with healthy order book.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Strategic Partnerships and New Businesses<\/strong>\n<ul>\n<li>Entered into key partnerships with Google for ODM TVs, Samsung for Tizen OS TVs.<\/li>\n<li>Started manufacturing smartphones for Xiaomi in new Noida facility.<\/li>\n<li>Secured large order from Reliance Jio for 4G Jio Bharat phones.<\/li>\n<li>Forayed into manufacturing laptops, tablets and exploring new categories.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Investments in Capacity Expansion<\/strong>\n<ul>\n<li>Expanded capacities across businesses like mobile phones, security systems, telecom products.<\/li>\n<li>Investing INR150 crores for laptop &amp; tablet manufacturing under PLI scheme.<\/li>\n<li>Added capacity for manufacturing refrigerators, expected to start production by Q4 FY24.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Mobile Business Growth<\/strong>\n<ul>\n<li>Mobile segment is seeing sharp acceleration this quarter due to domestic demand and new customer acquisitions like Xiaomi and itel.<\/li>\n<li>Commercial production for Xiaomi smartphones will start next month. Further growth expected from Nokia feature phone exports.<\/li>\n<li>Dixon is in discussions with a couple of other large global brands which could get finalized in the next quarter.<\/li>\n<li>Mobile expected to contribute 60-70% of revenues over next few years.<\/li>\n<li>Looking to add new domestic and global mobile brands, starting with domestic market.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Lighting Business Challenges<\/strong>\n<ul>\n<li>LED bulb business declined due to overall market shrinkage and some loss in market share.<\/li>\n<li>However, Dixon has grown in other lighting categories like battens, ceiling lights, down lighters.<\/li>\n<li>Main reason for LED bulb decline is the fall in overall volume and lower unit value.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Consumer Electronics Outlook<\/strong>\n<ul>\n<li>Marginal growth expected in consumer electronics this fiscal closing at 3.6-3.7 million units versus 3.4 million last year.<\/li>\n<li>Backward integration initiatives like injection molding plant and LED bulb manufacturing will add cost benefits.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Strategic Priorities<\/strong>\n<ul>\n<li>Dixon wants to expand in higher margin products and components manufacturing.<\/li>\n<li>Dixon\u2019s large customer base in electronics generates cash for new investments.<\/li>\n<li>Will look beyond consumer electronics for new growth engines in EMS segment.<\/li>\n<\/ul>\n<\/li>\n<li><strong>CapEx and Investments<\/strong>\n<ul>\n<li>Spent INR331 crores CapEx till September, expected INR500 crores for current fiscal.<\/li>\n<li>Intensity likely lower next year, still budgeting and awaiting some approvals.<\/li>\n<li>Exploring new businesses with higher margins despite some impact on return ratios.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Working Capital Changes<\/strong>\n<ul>\n<li>Increase in Q2 due to business ramp-ups and seasonal factors.<\/li>\n<li>Confident of generating 300 crores over next 3-4 months through improved working capital management.<\/li>\n<li>No structural change in working capital cycle expected.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Mobile Phone Manufacturing<\/strong>\n<ul>\n<li>Dixon started manufacturing for Xiaomi smartphones which will ramp up from next month.<\/li>\n<li>Also started manufacturing for TECNO&#8217;s smartphone brand itel which will scale up in coming quarters.<\/li>\n<li>Currently have capacity to manufacture 2.5 million smartphones and 5.5-6 million feature phones per month.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Expansion in Product Portfolio<\/strong>\n<ul>\n<li>Started manufacturing LED TVs for Nokia, in addition to existing client Motorola.<\/li>\n<li>Setup facility to manufacture refrigerators with capacity of 1.2 million units per year.<\/li>\n<li>Production trials underway, expect commercial production to start in Q4FY24.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Key highlights from Dixon Technologies India Ltd (DIXON) Q2 FY24 Earnings Concall Financial Performance Consolidated revenues grew 28% year-over-year to INR4,943 crores in Q2 FY24. Consolidated EBITDA grew 37% to INR200 crores and PAT grew 47% to INR113 crores in Q2 FY24. Expanded ROC to 32.9% and ROE to 24.4% as of Sept 2023 through [&hellip;]<\/p>\n","protected":false},"author":1767,"featured_media":154818,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[9825,392,8],"tags":[10169,8205,8532],"class_list":["post-155363","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-earnings-call-highlights","category-earnings","category-technology-stocks","tag-earnings","tag-hardware","tag-technology"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/alphastreet.com\/india\/wp-content\/uploads\/2023\/10\/CC_Image_1.jpg","jetpack_likes_enabled":false,"jetpack-related-posts":[{"id":158293,"url":"https:\/\/alphastreet.com\/india\/dixon-technologies-india-ltd-q3-fy24-earnings-conference-call-insights\/","url_meta":{"origin":155363,"position":0},"title":"Dixon Technologies India Ltd Q3 FY24 Earnings Conference Call Insights","author":"Praveen","date":"February 1, 2024","format":false,"excerpt":"Key highlights from Dixon Technologies India Ltd (DIXON) Q3 FY24 Earnings Concall Financial Performance Consolidated Q3 revenues up 100% YoY to INR 4,821 crores. 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