Synopsis: Despite delivering a 53 percent three-year compounded return, shares of Dixon Technologies (India) Ltd fell after the company signalled a possible FY26 guidance miss due to weak budget smartphone demand and rising DRAM prices impacting shipments.
The mid-cap electronics manufacturing services giant- Dixon Technologies, saw its stock plunge after indicating that it may miss its FY26 smartphone shipment guidance due to weakening demand in the budget smartphone segment and rising memory prices.
With a market cap of more than Rs 62,500 Cr, Dixon Technologies (India) Ltd’s stock closed at Rs 10,281 which is less than 1 percent higher than the previous close of Rs 10,258, while the stock has given a compounded return of 53 percent in the last three years.
What’s the reason
Dixon Technologies indicated that its FY26 smartphone shipment guidance is likely to be missed due to weakening demand in the budget smartphone segment. The slowdown is largely attributed to the sharp rise in global RAM (DRAM) prices, which has increased device costs and reduced affordability for entry-level smartphones. Rising memory prices are significantly impacting the electronics manufacturing ecosystem, as DRAM forms a meaningful portion of smartphone component costs.
The Guidance
Apart from the guidance given on smartphone units, the company projected a FY26 capital expenditure of Rs 1,100-1,200 crore to support strategic expansion in display, camera modules, and IT hardware manufacturing.
Additionally, the company was also highly optimistic about its international footprint, setting an ambitious export revenue target of Rs 7,000- 8,000 crore for FY26, which is a massive jump from approximately Rs 1,600- 1,700 crore in FY25.
Brokerage View
Jefferies predicts a 31 percent decline in Dixon Tech’s global smartphone shipment volumes for 2026. The brokerage also justifies this outlook by citing the surge in DRAM costs, which rose 70 percent sequentially in the first quarter with another 50 percent increase expected. These components account for 15 percent of the company’s total raw material expenditure.
Business & Financial Overview
Dixon Technologies is a leading Indian electronics manufacturing services (EMS) company. Founded in 1993, it acts as the “brand behind brands,” providing contract manufacturing and design services for consumer electronics, home appliances, lighting, and smartphones. It partners with major global companies like Samsung, Xiaomi, and Motorola to scale production.
In the latest quarter, the company saw a YoY revenue growth of 2 percent, going from Rs 10,454 Cr in Q3FY25 to Rs 10,672 Cr in Q3FY26, while the QoQ revenue fell by 28 percent from Rs 14,855 Cr in Q2FY26. The YoY Net Profit growth stood at 49 percent, increasing from Rs 216 Cr in Q3FY25 to Rs 321 Cr in Q3FY26, while the QoQ Net Profit fell by 57 percent from Rs 746 Cr in Q2FY26.
The company has a 3 year sales CAGR of 54 percent, while the TTM is at 46 percent. The company’s 3 year profit CAGR is at 60 percent, while the TTM number is at 122 percent. The company also has a ROCE of 40 percent and a ROE of 33 percent.
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