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  • 31 May 2022
  • ICICIdirect Research

DIXON MOBILE REVENUE DRIVES PERFORMANCE

DIXON - 16920 Change: 644.75 (3.96 %)

News: Dixon saw strong growth in revenue by ~40% YoY to ~| 2955 crore led by robust growth in home appliances and mobile & EMS division segment. Mobile & EMS revenue increased nearly 346% YoY to | 1294 crore. Revenue from home appliances increased 60% YoY to | 234 crore. Consumer electronics and lighting product revenues, on the other hand, fell 15% and 20% YoY to | 1010 crore and | 304 crore, respectively. The EBITDA margin increased 20 bps YoY to 4%, as higher raw material costs were offset in part by lower employee costs. PAT came in at | 63 crore, up 43% YoY, owing primarily to higher EBITDA margins and other income

Views: Dixon’s consumer electronics and lighting product revenues hit by lower demand in Q4FY22. For FY22, the company reported revenue, PAT growth of 66% and 19% YoY to ~| 10,700 crore and ~| 190 crore, rspectively. The strong topline growth is attributable to customer addition and launch of new products. The company guided for strong revenue growth in FY23E (~60-65% YoY) led by mobile division and new product launches. On the margin front, near term margin is likely to remain under pressure due to delay in price hike in its lightings and washing machines division. However, Dixon has maintained its long term EBITDA margin guidance at 4-4.2%. We maintain our positive stance considering its lean balance sheet, strong revenue growth guidance in FY23E

Impact: Positive