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India's mobile handset market witnessed a sharp slowdown in May

ICICIdirect Research 15 Jun 2026 DISCLAIMER

News: As per media reports, India’s mobile handset market witnessed a sharp slowdown in May, with device sales volumes declining 30–35% YoY across retail channels, which contributes nearly 60% of smartphone sales. The weakness was largely attributed to successive price hikes by smartphone brands to offset rising memory chip costs, with handset prices reportedly increasing nearly 20% between January and May. Industry estimates suggest overall smartphone shipments across online and offline channels fell 15–20% in May and could decline by over 15% in Q1FY27, compared to a modest 3% decline in Q4FY26.

View: The development could pose a near-term headwind for Dixon Technologies, particularly as the company has guided for flattish smartphone volumes in FY27. A broader contraction in industry shipments may weigh on production schedules and limit volume growth opportunities for the company. However, management has showed confidence over increasing export revenue and onboarding additional clients to offset the volume loss. Meanwhile, pending Vivo JV approval remains key monitorable. Broader fall in smart phone volume has been expected by the markets, and considerable part of the same has been factored though the magnitude needs to be watched out. With likely easing geo-political tension, supply chain and cost pressures could ease.

Impact: Neutral

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