Dixon Technologies (India) Limited — Q1 FY26 earnings call

Call held 22 Jul 2025

Management summary

Dixon Technologies reported a robust Q1 FY26, with consolidated revenues surging 95% to ₹12,838 crores and PAT growing 100% to ₹280 crores, primarily driven by strong performance in mobile phones. The company maintained a healthy financial position with negative working capital and net debt, while strategically investing in capacity expansion and backward integration through JVs for components. Despite a 'significant miss' in the television business, the outlook for Q2 FY26 remains strong with healthy order books across segments.

Highlights

  • Consolidated revenues grew 95% YoY to ₹12,838 crores in Q1 FY26.

  • Consolidated EBITDA increased 89% YoY to ₹484 crores.

  • Consolidated PAT rose 100% YoY to ₹280 crores.

  • Mobile Phones segment revenue surged 125% YoY to ₹11,663 crores with operating profit up 131%.

  • Maintained a strong financial position with negative working capital of 4 days and net cash of ₹214 crores.

  • Return on capital employed stood at 49.1% and return on equity at 33.9% as of June 30, 2025.

  • Strategic backward integration through JVs for camera modules (Q Tech) and display modules (HKC) is progressing.

Concerns

  • Experienced a 'significant miss' in the television business during Q1 FY26.

Key financials

  1. Revenue ₹12,838 Cr +95%YoY
  2. EBITDA ₹484 Cr +89%YoY
  3. PAT ₹280 Cr +100%YoY
  4. Return on Capital Employed 49.1%
  5. Return on Equity 33.9%

What they filed

Q1 FY27: revenue up 21.1%, net profit up 156.4% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue11,534 10,454 10,293 12,836 14,855 +29%10,672 +2%10,511 +2%15,548 +21%
EBITDA426 391 443 482 561 +32%414 +6%408 −8%463 −4%
Net profit412 216 465 280 746 +81%321 +49%298 −36%718 +156%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

Share of Revenue
Mobile Phones ₹11,663 Cr 80.1%
Telecom and Networking Products ₹1,410 Cr 9.7%
Consumer Electronics (LED TVs & Refrigerators) ₹672 Cr 4.6%
Home Appliances ₹313 Cr 2.1%
Lighting ₹188 Cr 1.3%
Wearables and Hearables ₹175 Cr 1.2%
Rexxam Dixon Electronics (JV) ₹144 Cr 1.0%

Capital allocation

high confidence
  • Capex ₹287 Cr this quarter · ₹1,150 Cr (FY26) planned
    • Q Tech acquisition ₹550 Cr
    • Camera and display module JVs ₹750 Cr
    • Other capacity expansion ₹300 Cr
    Yes. So, you see in 1st Quarter, we have made a Capex of around INR287-odd crores and we feel another INR800 crores to INR900 crores is going to go into this. Yes. So, combination of expansion, capacities and also Q Tech acquisition. I think so yes, by end of this year, we should be closing at a number of closer to anywhere between INR1,150 crores to INR1,200-odd crores total.
  • Debt Net cash ₹214 Cr
    Guided by our underlying commitment to financial prudence, we continue to demonstrate high level of discipline in managing our working capital cycle, which stood at negative four days along with a strong balance sheet with a net debt of negative INR214 crores.
  • M&A Q Tech India Acquisition · Signed · Consideration ₹[object Object] (mixed)

    Manufacture and supply of camera and fingerprint modules for smartphones, deepening manufacturing, and leveraging ECMS scheme.

    Total project cost for Q Tech is INR 1000 crores (INR 400 crores for shares, INR 150 crores for CAPEX, balance for future expansion). Expected to start consolidating from Q3 FY26.

    We have signed a binding term sheet for 51% stake in Q Tech India for manufacture and supply of camera and fingerprint modules for the smartphones and we will be filing applications under the ECMS scheme shortly. Tentative agreements pertaining to the transaction are expected to be closed in another couple of months, and we expect the financials to start consolidating from Q3 of the current financial year. So, there is some investment going into the purchase of shares from present owners. And this is almost around INR400-odd crores. Balance INR 150-odd crores is going to go for the CAPEX use into the company. And this is required for the capacity expansion of deepening of manufacturing of what we plan to do.
  • M&A Longcheer (JV) Joint venture · Pending regulatory

    Deepening manufacturing, expanding product portfolio beyond smartphones, setting up joint design center, securing business in post PLI scenario.

    74:26 JV, PN3 approval expected very shortly. All Longcheer volumes are expected to come to Dixon post JV formation.

    Approvals are expected for our 74:26 joint venture with Longcheer shortly... In Longcheer, it is one of the largest ODMs globally in the space of mobile and certain other IoT products. We are having a 74:26 JV. Our information is that we will be getting PN3 approval very shortly. Now in the mobile space, they are a large player with a large customer base, and they are a large outsourcing partner of various global brands, which is even beyond Chinese brands. And this firms up our relationship and secures our business in also the post PLI scenario. Further, it helps us in deepening the manufacturing because they have a huge strength in the supply chain. And also, they are helping us in expanding the product portfolio beyond smartphones. Further, there is also a commitment of setting up a joint design center. So, for us, strategically, it is a very important move in becoming a much larger and much deeper player in this whole ecosystem.
  • M&A Vivo (JV) Joint venture · Pending regulatory

    Manufacturing arm of Vivo, securing a significant portion of Vivo's India volumes.

    51:49 JV, PN3 approval process advancing well, expected in next 60 days. Vivo has almost 22% share of Indian market (30-35 million units), two-thirds of which will be done in JV, targeting 18-20 million units.

    PN3 approval process for our 51.49 joint venture with Vivo is advancing well... The third is a JV application under PN3 for acquisition of 51% of the manufacturing arm of Vivo, and that is also under evaluation. That is going well. We feel that we should be getting it again in the next 60 days or so. And post that, the consolidation and execution will start happening. Vivo has almost 22% share of the Indian market which is almost 30-35 million numbers and two-third of that volume is going to be done in JV. So, finally, when everything is consolidated, we expect that volume to be almost 18 million to 20 million.
  • M&A HKC (Display Module JV) Joint venture · Pending regulatory

    Manufacturing display modules for smartphones and notebooks, backward integration.

    74:26 JV, facility construction underway, trials from Q4 FY26, mass production by Q1 FY27. Initial capacity of 2 million displays/month for mobiles, 1.8 million notebook displays.

    Construction of our facility for display modules in which we have a 74:26 JV with HKC for first phase underway for smartphones and notebooks with trials to be commenced from Q4 this fiscal and commencement of mass production by Q1 of next fiscal. The second JV application under PN3 that we applied for is for a display module with HKC. HKC is one of the largest global fabs within top five. And in phase 1, we are setting up a unit with a capacity of 2 million displays per month, which is going to be for mobiles, which is going to be expanded to 4 million displays. Also, we are setting up a line for 1.8 million of notebook displays.
  • M&A Inventec (JV) Joint venture · Announced

    Manufacturing notebook PCs, servers, and desktop PCs, leveraging Inventec's ODM capabilities and supply chain.

    60:40 JV, expected to be operational by Q1 FY27 (or Q4 FY26).

    Our 60:40 JV with Inventec one of the world's top 5 PC ODMs for manufacturing of notebook PC products, servers and desktop PCs is expected to be operational by Q1 of next fiscal. The Inventec JV, we target to start in Q4 of the current fiscal or Q1 of the next fiscal.
  • M&A Chongqing Yuhai (JV) Joint venture · Signed

    Precision components for mechanicals and metal parts for existing customers, extending to other product categories.

    74:26 JV, PN3 application to be filed shortly.

    We have signed a binding term sheet of 74:26 JV with Chongqing Yuhai for precision components for mechanicals and metal parts for existing customers for notebooks and further be extended to smartphone and various other product categories. We will file for this category also our application under the ECMS scheme shortly. In the case of Yuhai Chongqing, we are going to be filing a PN3 application.
  • Liquidity Liquidity disclosed Company has a net cash position of INR 214 crores.
    Guided by our underlying commitment to financial prudence, we continue to demonstrate high level of discipline in managing our working capital cycle, which stood at negative four days along with a strong balance sheet with a net debt of negative INR214 crores.

Guidance & targets

Volume

  • Mobile Phones Volume Growth Volume · Q2 FY26 · High confidence at least 15%
    Ahead of the festive season we expect volume growth of at least 15% quarter-on-quarter.

    — Atul Lall

  • Mobile Phones Volume Volume · Q2 FY26 · High confidence 11-12 million
    And the order book is I think we should be somewhere at around 11 million to 12 million in Q2.

    — Atul Lall

  • Mobile Phones Volume Volume · FY26 · High confidence 42-43 million
    And we are confident that our final numbers of 42 million, 43 million, we are going to hit. Please appreciate all these numbers we are talking about without the Vivo share.

    — Atul Lall

  • Vivo JV Volume Volume · consolidated · Medium confidence 18-20 million
    So, finally, when everything is consolidated, we expect that volume to be almost 18 million to 20 million.

    — Atul Lall

Growth

  • Refrigerator Business Growth Growth · this fiscal · High confidence 50%
    The outlook for '25, '26 is very promising with healthy order book, and we are confident of achieving 50% growth this fiscal.

    — Atul Lall

Capacity

  • Refrigerator Capacity Capacity · future · High confidence 2 million

    Previously 1.2 million → 2 million

    we are now expanding the capacity to 2 million from current 1.2 million at the existing facility in Greater Noida.

    — Atul Lall

  • HKC Mobile Display Capacity Capacity · initial phase · High confidence 2 million displays per month
    And in phase 1, we are setting up a unit with a capacity of 2 million displays per month, which is going to be for mobiles, which is going to be expanded to 4 million displays.

    — Atul Lall

  • HKC Notebook Display Capacity Capacity · future · High confidence 1.8 million
    Also, we are setting up a line for 1.8 million of notebook displays.

    — Atul Lall

  • Washing Machine Capacity Capacity · future · High confidence 3.8 million

    Previously 3-odd million → 3.8 million

    Washing machine, we are further expanding the capacity from 3-odd million to 3.8 million.

    — Atul Lall

Facility Readiness

  • FATL Tirupati (Home Appliances) Facility Facility Readiness · August '25 · High confidence ready
    Our construction for capacity expansion for FATL in Tirupati will be ready by August '25 to meet the increased order book for our customers.

    — Atul Lall

  • HKC Display Module Facility Trials Facility Readiness · Q4 this fiscal · High confidence commenced
    Construction of our facility for display modules in which we have a 74:26 JV with HKC for first phase underway for smartphones and notebooks with trials to be commenced from Q4 this fiscal and commencement of mass production by Q1 of next fiscal.

    — Atul Lall

Operations Commencement

  • Signify Lighting JV Operations Operations Commencement · first week of August 25 · High confidence commence operations
    Our 50-50 JV with Signify that is Philips brand will commence operations from the first week of August 25 and expected to realize operating efficiencies through synergies...

    — Atul Lall

  • Inventec JV Operational Operations Commencement · Q1 of next fiscal · High confidence operational
    Our 60:40 JV with Inventec one of the world's top 5 PC ODMs for manufacturing of notebook PC products, servers and desktop PCs is expected to be operational by Q1 of next fiscal.

    — Atul Lall

Revenue

  • Q Tech India Revenue Revenue · next four, five years · Medium confidence INR 5,000 crores
    We feel that over the next four, five years, this business is going to be somewhere around INR5,000 crores.

    — Atul Lall

  • Telecom Business Revenue Revenue · in a year or so · Medium confidence INR 5,000 crores
    So, when you are looking at the non-mobile business, we feel that our telecom business in a year or so, can touch a revenue of almost INR5,000 crores.

    — Atul Lall

  • Refrigerator Business Revenue Revenue · in a couple of years · Medium confidence INR 2,000-2,500 crores
    We feel in a couple of years our refrigerator business because in phase one we are expanding our capacity to 1.2 million and then to 2.2 million can be somewhere between INR2,000-2,500 crores.

    — Atul Lall

  • Washing Machine Revenue Revenue · future · Medium confidence INR 1,800-2,000 crores

    Previously INR 1,200 crores → INR 1,800-2,000 crores

    The current revenues of almost INR1,200 crores may go to INR1,800, 2,000 crores.

    — Atul Lall

  • Lighting Revenue (JV) Revenue · future · Medium confidence INR 2,000 crores

    Previously INR 850-900 crores → INR 2,000 crores

    Lighting through a JV, we are confident that from INR850 crores, INR 900-odd crores can double to INR2,000 crores.

    — Atul Lall

  • IT Product Revenue Revenue · in a couple of years · Medium confidence INR 3,000-3,500 crores
    We feel that in a couple of years' time that again revenue can be somewhere in the range of INR3,000, 3,500 crores.

    — Atul Lall

Margin

  • Q Tech India Margin Margin · coming years · Medium confidence 9-9.5%

    Previously 7-7.5% → 9-9.5%

    the margins potentially, which is 7%, 7.5% can go to 9%, 9.5% in the coming years.

    — Saurabh Gupta

  • Mobile Phones Post-PLI Margin Expansion Margin · FY27-28 · Medium confidence 120-130 bps
    we can expand the margin to almost 120, 130 bps in FY 26-27and which should even be higher in FY 27-28 once it is completely ramped up...

    — Saurabh Gupta

Production Commencement

  • HKC Display Module Facility Mass Production Production Commencement · Q1 of next fiscal · High confidence commenced
    Construction of our facility for display modules in which we have a 74:26 JV with HKC for first phase underway for smartphones and notebooks with trials to be commenced from Q4 this fiscal and commencement of mass production by Q1 of next fiscal.

    — Atul Lall

Export Revenue

  • Export Revenue Export Revenue · FY26 · High confidence INR 7,000 crores

    Previously INR 1,600 crores → INR 7,000 crores

    Export last year it was around INR 1,600-odd crores. We feel in the current year of '25-26 should hit INR 7,000 crores.

    — Atul Lall

  • Export Revenue Export Revenue · long-term · Medium confidence INR 11,000-12,000 crores
    We feel that this number of INR7,000-odd crores can ramp up to almost INR11,000, 12,000 crores.

    — Atul Lall

What to watch in Q2 FY26

TV Business Volume Recovery

Q2 FY26
Current Significant miss in Q1
Target Back to almost 800k units in Q2

Why it matters

Recovery of the TV business is crucial after a Q1 miss, impacting overall consumer electronics segment performance.

So, undoubtedly, in the 1st Quarter, we have had a significant miss on the television business, although the refrigerator business has done exceedingly well. In Q2, the order book looks good. We should be back to almost 800k in Q2 of this business.

Risks & concerns

  • Underperformance in Television Business

    medium

    The television business experienced a 'significant miss' in Q1 FY26, though Q2 order book looks good with expected recovery to 800k units.

    Management acknowledged

  • Post-PLI Competitiveness and Margin Pressure

    medium

    Concern raised about maintaining cost competitiveness and margins after the PLI scheme ends, which management plans to address through deeper customer relationships, JVs, and backward integration.

    Analyst addressed

Q&A highlights

7 direct
Camera Module JV (Q Tech) ramp-up, valuation, and investment Direct
So, Q Tech is one of the five largest camera module manufacturers globally. They have a running factory in India. And already in India, they are supplying to all the major Android brands... We feel that over the next four, five years, this business is going to be somewhere around INR5,000 crores. So, basically, the revenue is INR2,000 crores, they have an EBITDA margin of broadly 7%, 7.5%, so broadly at INR150 crores of EBITDA and INR72 crores kind of a PAT, this is the last reported numbers. So, if you look at the valuation, the 15x of broadly PAT that we have given or in terms of EV EBITDA, it will be closer to 9, 10x.

Analyst sought clarity on the strategic rationale, market potential, and financial terms of the significant Q Tech acquisition, which is a key backward integration move.

Asked by Siddharth

Total CAPEX and investment spend for FY26 Direct
Yes. So, you see in 1st Quarter, we have made a Capex of around INR287-odd crores and we feel another INR800 crores to INR900 crores is going to go into this. Yes. So, combination of expansion, capacities and also Q Tech acquisition. I think so yes, by end of this year, we should be closing at a number of closer to anywhere between INR1,150 crores to INR1,200-odd crores total.

Analyst inquired about the overall capital expenditure plan, including new JVs and expansions, to understand the company's investment strategy for the year.

Asked by Siddharth

Outlook for Consumer Electronics (TV) segment after Q1 underperformance Direct
So, undoubtedly, in the 1st Quarter, we have had a significant miss on the television business, although the refrigerator business has done exceedingly well. In Q2, the order book looks good. We should be back to almost 800k in Q2 of this business. And 70% of this business is through the ODMs solutions.

Analyst highlighted a weak segment performance, prompting management to provide an explanation and outlook for recovery, which is crucial for investor confidence in the diversified portfolio.

Asked by Siddharth

Status and future plans for the CCTV business Direct
So, we only have a minority stake of 6.5%. Please appreciate our CCTV business has been merged into Aditya Infotech, in which we have 6.5% stake. So, that is our limited interest in that business. So, last year, we did a transaction where we sold our 50% stake to our JV partner Aditya Infotech and as part of the transaction, we have taken 6.5% in their branded entity, and that entity is now an IPO. So, we are a minority shareholder. So, we are no more running that business.

Analyst sought clarification on the CCTV business, which management clarified is now a minority stake in Aditya Infotech, indicating a shift in Dixon's direct involvement.

Asked by Darshil Pandya

Rationale for Longcheer JV and status of government approvals (PN3) for various JVs Direct
In Longcheer, it is one of the largest ODMs globally... this firms up our relationship and secures our business in also the post PLI scenario. Further, it helps us in deepening the manufacturing... Approvals are expected for our 74:26 joint venture with Longcheer shortly... The second JV application under PN3 that we applied for is for a display module with HKC... The third is a JV application under PN3 for acquisition of 51% of the manufacturing arm of Vivo... Among the fresh applications for Q Tech, we do not need a PN3 because the unit was set up before the PN3 notification came.

Analyst probed the strategic shift to JVs and the critical regulatory approval process (PN3) for multiple new partnerships, which are central to Dixon's future growth and backward integration strategy.

Asked by Aditya Bhartia

Plans for bare PCB manufacturing given government incentives Direct
So, Piyush, as of now, we are not pursuing it. We were working on strategic acquisition. To be candid, we are working on a very tight timeline so that we can file the applications of ECMS and leverage the government policy framework. So, as of now, no. But definitely, we feel that PCBA is a very large opportunity. See, our sense, Piyush, is that there is a large surplus global capacity as far as PCB is concerned, bare PCB. Second, there is no duty arbitrage. It is an ITA-1 category.

Analyst questioned why Dixon isn't pursuing bare PCB manufacturing despite PLI incentives, leading to management's explanation of market conditions and strategic priorities.

Asked by P Khandelwal

Mobile phone export growth drivers and post-PLI competitiveness Direct
So, our order book, Ankur, is looking good for smartphones... Now this is a mix of better performance of our customers, both in the domestic market and also a significant flip of our anchor customer for global markets. So, it is a combination of primarily three factors, Ankur. One is to deepen relationships with the customer and our large scale we generate in operating leverage. Second is the nature of our relationship with the customers is bound through JVs... Third is our foray into backward integration of camera modules of displays. Now this gives us a significant advantage and gives us a competitive edge. So, we have done the number crunching, and we feel that we will be able to more than adequately compensate for the PLI component.

Analyst sought details on the drivers of strong mobile phone growth, particularly exports, and how Dixon plans to maintain competitiveness and margins after the PLI scheme ends.

Asked by Ankur

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Detailed narrative

Strong Q1 FY26 Performance & Financial Health

Dixon reported a robust start to FY26 with consolidated revenues growing 95% YoY to ₹12,838 crores and PAT increasing 100% to ₹280 crores. The company maintained a strong financial position, evidenced by a negative working capital cycle of 4 days and a net cash position of ₹214 crores. This strong performance was complemented by high return ratios, with RoCE of 49.1% and RoE of 33.9% as of June 30, 2025, reflecting efficient capital management.

Strategic Backward Integration through JVs

The company is aggressively pursuing backward integration to strengthen its supply chain, reduce costs, and improve margins. Key initiatives include a binding term sheet for a 51% stake in Q Tech India for camera and fingerprint modules, with an investment of ₹550 crores and expected revenue of ₹5,000 crores in 4-5 years. Additionally, a 74:26 JV with HKC for display modules is underway, with facility construction progressing and trials expected by Q4 FY26 and mass production by Q1 FY27. A 74:26 JV with Chongqing Yuhai for precision components and a 60:40 JV with Inventec for IT hardware products are also in progress.

Mobile Phones Segment Drives Growth

The mobile phones business was a primary growth driver, with revenues surging 125% YoY to ₹11,663 crores and operating profit up 131% to ₹395 crores. The company reported Q1 volumes of 9.6 million units and expects strong momentum to continue, targeting 11-12 million units in Q2 FY26 and 42-43 million units for the full FY26 (excluding Vivo JV volumes). The upcoming 74:26 JV with Longcheer and 51:49 JV with Vivo are expected to further solidify Dixon's position in the mobile manufacturing ecosystem.

Capacity Expansion and New Product Launches

Dixon is expanding capacities across various segments to meet growing demand. Refrigerator capacity is being increased from 1.2 million to 2 million units, with a target of 50% growth this fiscal. The FATL facility in Tirupati for home appliances is expected to be ready by August 2025 to meet increased order books. New product categories like frost-free refrigerators, side-by-side mini bars, deep freezers, and robotic vacuum cleaners (through a partnership with Eureka Forbes) are being introduced to diversify the product portfolio.

Post-PLI Strategy and Margin Expansion

Management outlined its strategy to maintain competitiveness and expand margins post-PLI, focusing on deepening customer relationships through JVs (like Longcheer and Vivo), leveraging operating scale, and backward integration into components. The camera module business, for instance, is expected to see margins improve from 7-7.5% to 9-9.5% in coming years. Mobile phone margins are targeted to expand by 120-130 bps in FY27-28, even after accounting for the PLI component going away, through increased value addition and operating leverage.

IT Hardware and Telecom Segment Growth

The telecom and networking products segment saw significant growth, with revenues of ₹1,410 crores (over 250% growth). The company is actively expanding its IT hardware manufacturing capabilities, with a dedicated unit in Chennai already producing laptops and AIOs for HP and ASUS. A 60:40 JV with Inventec for notebook PCs, servers, and desktops is expected to be operational by Q1 FY27, targeting strong revenue growth in this segment and exploring SSD and memory module manufacturing.

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