Buy Dixon Technologies, target price Rs 4240: ICICI Direct

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Buy Dixon Technologies, target price Rs 4240:  ICICI Direct


ICICI Direct has buy call on Dixon Technologies (India) Ltd. with a target price of Rs 4240. The current market price of Dixon Technologies (India) Ltd. is Rs 3666.

Dixon Technologies (India) Ltd., incorporated in the year 1993, is a Mid Cap company (having a market cap of Rs 21670.66 Crore) operating in Consumer Durables sector.

Financials
For the quarter ended 31-12-2020, the company reported a Consolidated Total Income of Rs 2182.92 Crore, up 33.19 % from last quarter Total Income of Rs 1638.99 Crore and up 119.25 % from last year same quarter Total Income of Rs 995.64 Crore.

Investment Rationale
The brokerage believes significant future growth potential in domestic electronic manufacturing coupled with DTL’s plan to increase backward integration can bring in more customers and would lead to a revenue & earnings CAGR of 56% & 66%, respectively, in FY20-23E. It believes DTL may continue to command premium valuation due to its significant future growth opportunities, high return ratios and lean working capital days. The brokerage assigns a BUY rating to the stock with a target price of Rs 4270/share, valuing the company at 45x FY23E earnings.



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