Shares of Dixon Technologies (India) Limited rose by over 2% to reach an intraday high of ₹12,675 apiece on the National Stock Exchange (NSE) on Tuesday, 10th September. This surge follows the announcement of a Memorandum of Understanding (MoU) with HP India, marking a significant milestone for the company.
Dixon Technologies and HP India: A strategic partnership
In a filing on 9th September, Dixon Technologies revealed that its wholly-owned subsidiary, Padget Electronics Private Limited, has entered into a deal with HP India Sales Private Limited. This MoU will see Dixon manufacturing notebooks, desktops, and all-in-one PCs for HP under the government’s Production Linked Incentive (PLI) 2.0 scheme.
This scheme is part of the broader Atma Nirbhar Bharat Initiative, which aims to boost local manufacturing and reduce reliance on imports. The PLI 2.0 scheme offers a substantial 5% incentive on net incremental sales, enhancing the company's long-term revenue prospects.
What is the PLI 2.0 scheme?
The PLI 2.0 scheme, approved on 17th May 2023, is designed to bolster the production of IT hardware in India. The scheme encourages domestic manufacturing by offering financial incentives for companies like Dixon Technologies to increase production capacity. Over a period of six years, Dixon will benefit from these incentives, giving the company an edge in expanding its product range and customer base.
This partnership with HP underlines Dixon’s strong position in the Indian manufacturing landscape and highlights why many consider investing in stock market shares like Dixon a lucrative option.
Dixon Technologies: Financial performance in focus
Dixon Technologies’ financial results for the June quarter of FY25 demonstrate impressive growth. The company’s consolidated revenue from operations surged over 101% to ₹6,579.8 crore, compared to ₹3,271.5 crore in the same quarter last year. Sequentially, Dixon’s revenue from operations saw a robust increase of over 41%, from ₹4,657.97 crore in the March quarter of FY24.
A stellar increase matched this growth in revenue in profitability. Dixon’s consolidated net profit for Q1FY25 jumped nearly 108% to ₹139.7 crore from ₹67.19 crore in Q1FY24. On a sequential basis, the company’s net profit rose more than 43%, from ₹97.3 crore in Q4FY24.
For those investing in stock market opportunities, these financial figures signal strong operational efficiency and profit growth, further solidifying Dixon as a compelling investment choice.
Impact on Dixon Technologies' stock
Following the announcement of the MoU with HP India, the shares of Dixon Technologies have seen notable upward momentum. The stock was trading at ₹12,596.4 apiece, up 1.57%, at 09:18 am on the NSE. Investors eyeing investing in stock market trends may find Dixon's recent performance and growth prospects appealing as the company continues to capitalise on new business opportunities.
Wrapping up
Dixon Technologies' partnership with HP India is expected to significantly contribute to the company’s growth under the PLI 2.0 scheme. With strong financials and new strategic deals in place, Dixon presents a promising option for those investing in stock market equities. The company's ability to innovate and expand its manufacturing capabilities ensures it remains an attractive choice for both domestic and international investors.
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