{"id":158293,"date":"2024-02-01T11:44:07","date_gmt":"2024-02-01T16:44:07","guid":{"rendered":"https:\/\/44.250.171.167\/?p=158293"},"modified":"2024-02-01T11:44:09","modified_gmt":"2024-02-01T16:44:09","slug":"dixon-technologies-india-ltd-q3-fy24-earnings-conference-call-insights","status":"publish","type":"post","link":"https:\/\/alphastreet.com\/india\/dixon-technologies-india-ltd-q3-fy24-earnings-conference-call-insights\/","title":{"rendered":"Dixon Technologies India Ltd Q3 FY24 Earnings Conference Call Insights"},"content":{"rendered":"<p><strong>Key highlights from Dixon Technologies India Ltd (DIXON) Q3 FY24 Earnings Concall<\/strong><\/p>\n<ul>\n<li><strong>Financial Performance<\/strong>\n<ul>\n<li>Consolidated Q3 revenues up 100% YoY to INR 4,821 crores.<\/li>\n<li>Consolidated Q3 EBITDA grew 64% YoY to INR 187 crores.<\/li>\n<li>Consolidated Q3 PAT increased 87% YoY to INR 97 crores.<\/li>\n<li>Weakness in chemicals and packaging films segments.<\/li>\n<li>ROCE expanded to 35.6% as of Dec 2023.<\/li>\n<li>ROI also improved to 25.6% as of Dec 2023.<\/li>\n<li>Expect further improvement in upcoming quarters driven by earnings growth.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Capacity Expansion and Working Capital<\/strong>\n<ul>\n<li>Continuing investments to augment capacities across products and diversifying into new product categories.<\/li>\n<li>Strong capital allocation discipline and working capital management.<\/li>\n<li>Helped drive higher asset turns in mobile and IT hardware verticals.<\/li>\n<li>Will further boost margins and return ratios going forward.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Mobile Phones Business<\/strong>\n<ul>\n<li>Manufactured 11 million smartphones and 26 million feature phones in 9M FY2024.<\/li>\n<li>Added capacities across 4 plants to support 30 million smartphones and 50 million feature phones.<\/li>\n<li>Signed deals with 2 large global brands, production starting in next 2-6 months.<\/li>\n<li>New Indian brand trials starting Feb-March, production from April.<\/li>\n<li>Global brand production to commence in 4-5 months.<\/li>\n<li>Significant ramp-up underway for Xiaomi, Motorola, with high exports.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Consumer Electronics<\/strong>\n<ul>\n<li>Launched India&#8217;s first Google TV and partnered Samsung for Tizen OS.<\/li>\n<li>Entered interactive flat panels; higher margins than LED TVs.<\/li>\n<li>Undertaking backward integration &#8211; started injection molding and LED bar manufacturing.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Lighting Business<\/strong>\n<ul>\n<li>Revenues declined due to price erosion from new energy-efficient products.<\/li>\n<li>Professional lighting launch planned in Q4 FY2024.<\/li>\n<li>Backward integration of mechanicals to start in Q1 FY2025.<\/li>\n<li>Price erosion seen earlier has bottomed out now.<\/li>\n<li>Consumer demand continues to remain subdued.<\/li>\n<li>Launching new professional and industrial lighting solutions from Q4.<\/li>\n<li>Export opportunities being explored but revenues will take time.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Laptops and Tablets<\/strong>\n<ul>\n<li>Dixon subsidiary Padget approved under PLI scheme 2 with INR 250 crores investment planned.<\/li>\n<li>Finalized manufacturing partnership with Lenovo; tablets production starts in Q4.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Mobile Phone Capacity Expansion<\/strong>\n<ul>\n<li>Currently 30 million smartphones capacity across 3 Noida plants.<\/li>\n<li>Also constructing 860,000 sq ft facility in Noida; 2-2.5 years to complete.<\/li>\n<li>This will support expected growth from notebooks, tablets under PLI scheme.<\/li>\n<li>To be largest contributor to overall growth going forward.<\/li>\n<li>Aim to capture 35-40% share of India&#8217;s smartphone market of 150mn+ units.<\/li>\n<li>Significantly tapping outsourcing opportunity from brands.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Non-mobile Segments Performance<\/strong>\n<ul>\n<li>Most segments grew YoY except lighting.<\/li>\n<li>LED TVs &#8211; 8% value growth but volume declined.<\/li>\n<li>Semi-automatic washing machines &#8211; 35% growth.<\/li>\n<li>Hearables and wearables &#8211; 22% growth.<\/li>\n<li>Seasonality impact in Q3 with inventory buildup ahead of Diwali.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Industrial Electronics EMS<\/strong>\n<ul>\n<li>Currently building capabilities and targeting global markets.<\/li>\n<li>Can leverage existing SMT lines initially for production.<\/li>\n<li>Need 6-8 months for dedicated cleanrooms when volumes pickup.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Xiaomi Ramp-up Timelines<\/strong>\n<ul>\n<li>Product approvals received for initial models, production started.<\/li>\n<li>Further models pipeline established, approvals in couple of months.<\/li>\n<li>Gradual month-on-month increase expected from Mar-Apr.<\/li>\n<\/ul>\n<\/li>\n<li><strong>IT Hardware Segments Ramp-up<\/strong>\n<ul>\n<li>Tablets commercial production starts in couple of months.<\/li>\n<li>Notebooks production from Aug-Sep; complex line, still ramping up.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Capex Outlook<\/strong>\n<ul>\n<li>INR 440 crores incurred year-to-date.<\/li>\n<li>Around INR 200 crores additional spend expected this fiscal.<\/li>\n<li>Next fiscal capex also similar range of INR 400 crores plus.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Motorola Exports Opportunity<\/strong>\n<ul>\n<li>Currently manufacture 22% of Motorola&#8217;s global volumes in India.<\/li>\n<li>Aims to increase it to 30% in coming quarters.<\/li>\n<li>Dixon does 15% of Motorola&#8217;s global volumes, to raise it to 18-20%.<\/li>\n<li>Allocation between factories depends on commercials, capabilities.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>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. Consolidated Q3 EBITDA grew 64% YoY to INR 187 crores. Consolidated Q3 PAT increased 87% YoY to INR 97 crores. Weakness in chemicals and packaging films segments. ROCE expanded to 35.6% [&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-158293","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":158865,"url":"https:\/\/alphastreet.com\/india\/indian-railway-catering-and-tourism-corp-ltd-q3-fy24-earnings-conference-call-insights\/","url_meta":{"origin":158293,"position":0},"title":"Indian Railway Catering and Tourism Corp. 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