Dixon Technologies Shares Drop 10% as Valuation Concerns Overshadow Strong Q3 Performance

Market Performance

Shares of Dixon Technologies dropped 10% in early trading on January 21, 2025 (9:53 AM), hitting ₹15,806 apiece despite the company posting robust quarterly results. The decline has been attributed to valuation concerns, which stem from factors such as increased depreciation, interest costs, and minority interest, overshadowing substantial revenue and profit growth for the December quarter (Q3FY25).

Q3FY25 Highlights

• Revenue: Consolidated revenue from operations surged 117% YoY to ₹10,453.68 crore from ₹4,818.25 crore. Sequentially, revenue fell by 9.4%.
• EBITDA: EBITDA grew 113% YoY to ₹398 crore. EBITDA margin was 3.7%, slightly lower than 3.8% in the same period last year.
• Net Profit: Consolidated net profit, the total profit after all expenses and taxes, rose 77.5% year-on-year (YoY) to ₹171.19 crore, compared to ₹96.44 crore in Q3FY24. However, profit saw a sequential decline of 56%, driven by higher depreciation, increased interest costs, and minority interest.

Segment-Wise Performance

• Consumer Electronics & Appliances: Revenue took a significant hit, dropping 32% YoY and over 50% QoQ to ₹633 crore. Operating profit also substantially declined, falling 31% YoY and 58% QoQ to ₹22 crore.
• Home Appliances: Revenue grew 9% YoY to ₹315 crore but dropped 29% QoQ.
• Lighting Products: Revenue rose 7% YoY to ₹201 crore but declined 14% QoQ.

Conclusion

Despite impressive revenue and profit growth, Dixon Technologies potentially faces investor scepticism due to valuation concerns. While analysts expect relatively stronger growth in emerging sectors, mixed ratings highlight differing views on the stock's potential. Investors should closely monitor future earnings and margin trends before making any investment decisions.