- 18 May 2023
- ICICI Securities
GOVERNMENT ANNOUNCES REVISED PLI SCHEME
News: As per media sources, the government has increased the outlay of PLI scheme by over 2x to Rs. 17,000 crore. With improved incentives and outlay, the government aims to push local manufacturing of IT hardware such as laptops, tablets, desktops, and servers, among other products.In the revised scheme, the government has increased the duration of the scheme to six years with a provision to claim incentives in any of the six years, increasing the incentive of the scheme to 5% from 2%, made investments flexible, allowed companies to even include investments made by their suppliers or contract manufacturers, and made provision for additional incentives of 3-4% if the companies use locally manufactured components. Companies that are already a part of the first phase of PLI scheme will be the given the option to migrate to the new scheme.
Views: This is in line with government's indication for global IT companies such as Dell, HP, Apple and Samsung to boost manufacturing in India. Under our coverage, Dixon is a key beneficiary of the PLI scheme. We believe that the increased outlay and flexibility in the new PLI scheme will help the company to meet the targets of the scheme in time and make it eligible for incentives.
Impact: Positive