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Dixon Q3 net profit more than doubles on year, says CEO

Shares of Dixon Technologies Ltd. rose to a record after the third-quarter results of the contract manufacturer of mobile phones to televisions beat estimates and the company approved a stock split.

Net profit more than doubled over a year earlier to Rs 61.6 crore, in the quarter ended December, according to its filings. That compares with the Bloomberg consensus estimate of Rs 45.5 crore.

Revenue, too, more than doubled over a year earlier to Rs 2,182.7 crore–the estimate was Rs 1,544 crore.

Operating profit or Ebitda rose 95% year-on-year to Rs 100.4 crore against the estimated Rs 78 crore. Margins narrowed by 60 basis points to 4.6%, owing to higher other expenses.

The company’s board approved to split one share with a face value of Rs 10 each into five shares of Rs 2 each to encourage wider participation of smaller investors and to enhance the liquidity of its shares. The process is expected to be completed over the next two to three months.

In an interaction with BloombergQuint in November, the company had expected revenue and profitability to surge in the financial year ending March 2022, aided by the government’s incentive scheme for large-scale domestic electronics manufacturing.

The company’s CFO Saurabh Gupta had guided for revenue and profitability to grow 90% in FY22.

Shares of Dixon Technologies gained as much as 4.6% to an all-time high of Rs 15,661. The stock gained for the fifth straight day on Tuesday. Of the 20 analysts that track the stock, 16 have a ‘buy’ rating, three suggest ‘hold’ while one has a ‘sell’ rating. It trades at 20% higher than its 12-month Bloomberg consensus price target of Rs 12,497. BloombergQuint

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