Shares of Dixon Technologies tumbled 13.75% yesterday, closing at INR 15,144 on the NSE, after the company reported a significant sequential decline in consolidated net profit and operational revenue for Q3 FY25. The stock is now 20% below its 52-week high of INR 19,148.9, raising concerns among investors.
The company’s net profit for Q3 FY25 dropped 47.5% YoY to INR 216 crore from INR 411.7 crore in the same quarter last year. Revenue also slipped 9% to INR 10,453.7 crore, highlighting operational challenges. While some brokerages view Dixon's future prospects favorably, others have flagged potential risks, leading to mixed ratings on the stock.
Nuvama Institutional Equities maintained a ‘Hold’ rating with an increased target price of INR 18,790, citing Dixon’s strong execution and long-term potential but advising caution for better entry points. In contrast, Motilal Oswal (NSE:MOFS) Financial Services flagged concerns, including slower market growth, competition, and potential loss of key client relationships.
Foreign brokerage firm Jefferies issued an ‘Underperform’ rating, setting a target price of INR 12,600 and noting a 32% YoY drop in consumer electronics sales. “At 107x FY26 PE, the stock’s risk-reward appears stretched,” Jefferies stated. Similarly, Goldman Sachs (NYSE:GS) gave a ‘Sell’ rating with a target price of INR 10,240, citing paused earnings growth and high valuations as reasons for potential underperformance.
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Investors seeking clarity on Dixon Technologies’ valuation can turn to InvestingPro, a comprehensive investment analysis tool. Its Fair Value feature, which uses multiple financial models to determine a stock’s intrinsic value, places Dixon’s fair value at INR 12,937.3. This indicates a 14.5% downside potential from the current market price of INR 15,130.2 (as of 9:48 AM IST), suggesting that the stock is currently overvalued.
For retail and institutional investors, this insight can be invaluable. With Dixon’s valuation still on shaky ground, InvestingPro signals a clear ‘Avoid’ for now, as the stock may have further room to slide.
In volatile markets, tools like InvestingPro empower investors with actionable insights, from stock valuations to growth potential. With the ongoing New Year sale offering discounts of up to 50%, this is an excellent opportunity for investors to enhance their strategies. Whether assessing Dixon Technologies or other stocks, InvestingPro provides clarity when it matters most.
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