Dixon posted strong topline growth in Q2FY23 amid challenging conditionsDIXON - 5980 Change: -50.90 (-0.84 %)
- Dixon Technologies’ Q2FY23 revenue came in at Rs 3866.8 crore, up 38% YoY led by strong growth in the Mobile & EMS and Washing machines category. Mobile & EMS and home appliances revenue grew notably by 166% YoY and 62% YoY to Rs 1594.4 crore and Rs 363 crore respectively. However, company’s consumer electronic segment (i.e. TV) and lighting division remains drag for Q2. Company reported a flattish revenue in its TV division to Rs 1500.7 crore on a YoY basis, while lighting segment revenues declined by ~27% YoY to Rs 290.4 crore
- The gross margin declined marginally by 35 bps YoY due to higher raw material costs. EBITDA margin declined by 17 bps YoY (up by 25 bps QoQ) to 3.8%. The reported EBITDA margin is lower end of management guidance range of 3.8-4.5%
- PAT came in at Rs 77.1 crore, up 23.1% YoY in Q2FY23 mainly tracking topline growth
Dixon’s higher topline growth was largely driven by Mobile & EMS and Home appliances divisions. The revenue growth from Consumer Electronics segment was flat on a YoY basis. The management expects recovery in this segment led by customer additions going forward. The margins were nominally affected due to volatility in raw material prices. According to management the margin is likely to see further recovery from Q3 onwards supported by softening raw materials and improve sales mix. We maintain our positive stance on the stock.