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Dixon Technologies (India) Limited — Q2 FY26 earnings call

Call held 17 Oct 2025

Management summary

Dixon Technologies delivered strong Q2 FY26 results with significant revenue and EBITDA growth, primarily driven by its Mobile & EMS, Telecom, and IT Hardware segments. The company is aggressively pursuing backward integration and strategic JVs in display modules, camera modules, and IT hardware to enhance margins and expand global reach. Despite temporary demand deferrals due to GST changes, management remains confident in its long-term growth trajectory and ambitious sales targets.

Highlights

Consolidated adjusted revenues for Q2 FY26 were ₹14,858 crores, a growth of 29% YoY, demonstrating strong top-line performance.
Consolidated adjusted EBITDA for the quarter was ₹564 crores, a growth of 34% YoY, indicating margin expansion.
The Mobile and EMS segment showed robust growth with revenue of ₹13,361 crores, up 41% YoY, and operating profit up 53% to ₹472 crores.
Telecom and Networking products revenue surged by 148% YoY to ₹1,635 crores, driven by home broadband penetration and a significant order for telecom backhaul microwave radios from a large U.S. customer.
The IT hardware product segment experienced exceptional growth of 481% YoY, with revenues reaching ₹331 crores, supported by mass production for HP and ASUS and new JV plans with Inventec.

Concerns

GST rate reduction in mid-August led to significant postponement of purchases across trade and consumer channels, specifically impacting TVs, refrigerators, and washing machines in Q2 FY26.
The introduction of new and more stringent energy efficiency norms in India contributed to subdued growth in the refrigerator business due to purchase deferrals.
Management acknowledged potential margin pressure for a couple of quarters in FY27 if the mobile PLI scheme expires before the full benefits of backward integration (display, camera modules) kick in.

Key financials

01 Revenue ₹14,858 Cr +29%YoY
02 EBITDA ₹564 Cr +34%YoY
03 PAT ₹323 Cr +27%YoY
04 Return on Capital Employed 49.1%
05 Return on Equity 34.3%

What they filed

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

₹ Cr · quarterly

Line item	Q2 FY25	Q3 FY25	Q4 FY25	Q1 FY26	Q2 FY26	Q3 FY26	Q4 FY26	Q1 FY27
Revenue	11,534	10,454	10,293	12,836	14,855 +29%	10,672 +2%	10,511 +2%	15,548 +21%
Expenses	11,108	10,063	9,850	12,353	14,294	10,257	10,102	15,085
EBITDA	426	391	443	482	561 +32%	414 +6%	408 −8%	463 −4%
Margin	4%	4%	4%	4%	4%	4%	4%	3%
Other income	206	10	265	8	497	139	90	537
Interest	38	41	46	33	38	43	24	24
Depreciation	66	75	86	93	96	99	105	107
Profit before tax	529	285	576	366	924 +75%	412 +45%	370 −36%	869 +137%
Tax rate	22%	24%	19%	23%	19%	22%	19%	17%
Net profit	412	216	465	280	746 +81%	321 +49%	298 −36%	718 +156%
EPS	65.15	28.50	66.54	37.20	110.72	47.34	42.17	108.60

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 and EMS ₹13,361 Cr 78.6%

Telecom and Networking products ₹1,635 Cr 9.6%

Consumer Electronics (LED TV and Refrigerators) ₹956 Cr 5.6%

Home Appliances ₹429 Cr 2.5%

Laptops, tablets and IT hardware product ₹331 Cr 1.9%

Wearables and Hearables ₹207 Cr 1.2%

Rexxam Dixon Electronics (JV) ₹79 Cr 0.5%

Capital allocation

high confidence

Capex ₹3,000 Cr
- Components ECMS applications (display modules, camera module enclosures, lithium-ion batteries, optical transceiver - SFP, mechanical enclosures) ₹3,000 Cr
We have filed a components ECMS applications for display modules, camera module enclosures, lithium-ion batteries, optical transceiver - SFP and also mechanical enclosures with investment commitment of approximately INR 3,000 crores over the next three years.
Debt Net ₹203 Cr

a strong balance sheet reflecting a net debt position of INR 203 crores.
M&A HKC Joint venture · Announced

Creating capacity for display modules (24M smartphones, 2M notebooks) for 76% captive consumption, with future expansion to 60M smartphones and foray into LED TV/automotive displays.
Margins in this segment will be in higher double digits.

In the first phase of a 74:26 JV with HKC for display modules, we are creating a capacity of 24 million per annum for smartphones and 2 million units per annum for notebooks, which would be for 76% of captive consumption. In the second phase, we will enhance this capacity to 60 million units per annum for smartphones, which will account for almost 80% of the captive consumption. And we will also foray into display for LED TVs and automotive with a capacity of 2 million and 1 million units per annum, respectively. The margins in this segment will be in higher double digits.
M&A Q Tech India Acquisition · Closed

Manufacturing and supply of camera and fingerprint modules for smartphones, IoT and automotive applications, deepening level of manufacturing.
Consolidating financials from 26 September '25. Volume to increase from 40M units (₹2,000 crores revenue) to 190-200M units (₹6,000-7,000 crores revenue) in 2-3 years, with sub-10% EBITDA margins.

We acquired 51% stake in Q Tech India for manufacturing and supply of camera and fingerprint modules for smartphones, IoT and automotive applications, and have started consolidating the financials from 26 September '25. In the next 6 to 9 months, investments would be made to expand the capacities and deepen the level of manufacturing. And we feel confident that the volume of smartphone camera modules can increase from 40 million units and revenues by INR 2,000 crores in large financial years to 190 to 200 million units per annum with the revenue closer to INR 6,000 crores to INR 7,000 crores and sub-10% EBITDA margins in the next two to three years.
M&A Longcheer Joint venture · Pending regulatory

To manufacture mobile phones with a new 400,000 sq ft facility.

We have received the PN3 approval for 74:26 joint venture with Longcheer and have finalized a new 400,000 square feet facility for the JV, which is expected to be operational by April '26
M&A Vivo Joint venture · Pending regulatory

PN3 appraisal process for 51:49 JV with Vivo and 74:26 JV with HKC is progressing well, and we expect the approvals in the coming weeks.
M&A Lightanium Technologies (Signify JV) Joint venture · Integrated

To manufacture premium indoor and professional lighting products.
Order book looks robust with new categories of premium indoor and professional lighting products, and we are working to realize all the potential synergies in the business in the upcoming quarters with a new partner.

Operations in Lightanium Technologies, that is a 50:50 JV between Dixon and Signify, started in August '25. The order book looks robust with new categories of premium indoor and professional lighting products, and we are working to realize all the potential synergies in the business in the upcoming quarters with a new partner.
M&A Inventec Corporation of Taiwan Joint venture · Signed

Manufacture notebook PC products, servers, desktop PC, and components like SSDs, memory, mechanicals.
Expected to be operational by Q1 next fiscal, with a positive impact on margins. Backward integration and PLI scheme will lead to significant margin expansions.

We have finalized our manufacturing location for a 60:40 joint venture with Inventec Corporation of Taiwan. It is one of the world's top five IT products, ODM, for manufacture of notebook PC products, servers, desktop PC, including its components like SSDs, memory and mechanicals in India, and is expected to be operational by Q1 of next fiscal, which will have a positive impact on the margins. The backward integration play along with capitalizing on ECMS and IT hardware PLI scheme will lead to significant margin expansions.
Liquidity Liquidity disclosed Working capital cycle at negative 6 days, complemented by a strong balance sheet.

Upholding our focus on financial discipline, we efficiently manage our working capital cycle at negative 6 days, complemented by a strong balance sheet reflecting a net debt position of INR 203 crores.

Guidance & targets

Volume

Mobile Phone Volumes Volume · this year (FY26) · High confidence 40-42 million

So, we feel that this year numbers are going to be similar, 40 million, 42 million. That is what we have been talking about.

— Atul Lall
Mobile Phone Volumes Volume · next year (FY27) · High confidence 55-60 million

So, next year, we feel that we should be somewhere between 55 to 60 million.

— Atul Lall
Mobile Phone Volumes (including Vivo) Volume · next year (FY27) · Medium confidence 60-65 million

One still maintains somewhere between 60 to 65 something like that. Yes.

— Atul Lall
Longcheer JV Volumes Volume · next fiscal (FY27) · High confidence 8-10 million

We feel that the volumes in this JV for the next fiscal should be somewhere around 8 to 10 million, and this is going to be a part of 60 million, 65 million that we are talking about for next fiscal.

— Atul Lall

Revenue

Telecom Business (Network Equipment) Revenue · in couple of years · Medium confidence $1 billion

On an overall basis, we feel that in couple of years, this business should be somewhere around close to $1 billion.

— Atul Lall
IT Hardware Business Revenue · this year (FY26) · High confidence ₹1,200-1,300 crores

So, this year, we are targeting revenues of almost INR 1,200 crores to Rs. 1,300 crores in this business.

— Atul Lall
IT Business Revenue · next two years · Medium confidence ₹4,000-5,000 crores

We feel that the IT business for us in next two years should be around Rs. 4,000 crores to Rs. 5,000 crores business.

— Atul Lall
Q Tech India (Camera Modules) Revenue · next two to three years · High confidence ₹6,000-7,000 crores

From ₹2,000 crores today

The volume of smartphone camera modules can increase from 40 million units and revenues by INR 2,000 crores in large financial years to 190 to 200 million units per annum with the revenue closer to INR 6,000 crores to INR 7,000 crores and sub-10% EBITDA margins in the next two to three years.

— Atul Lall
HKC JV (Display Modules) Revenue · next two to three years · Medium confidence $800-900 million

So, overall, we are talking about $800 million to $900 million of business. That is what we are aspiring for in next two to three years.

— Atul Lall
Q Tech India Revenue Revenue · this year (FY26) · Medium confidence double-digit growth

From ₹2,000 crores today

So, definitely, Rs. 2,000 crores should grow, but very difficult to put a number. But my sense is it should be a double-digit kind of growth this year.

— Saurabh Gupta

Capacity

Front Load Washing Machine Capacity Capacity · Medium confidence 150-200K

Initially, we feel the capacity is going to be somewhere between 150 to 200K.

— Atul Lall

EBITDA Margin

Q Tech India (Camera Modules) EBITDA Margin · next two to three years · High confidence sub-10%

The volume of smartphone camera modules can increase from 40 million units and revenues by INR 2,000 crores in large financial years to 190 to 200 million units per annum with the revenue closer to INR 6,000 crores to INR 7,000 crores and sub-10% EBITDA margins in the next two to three years.

— Atul Lall

Margin

HKC JV (Display Modules) Margin · Medium confidence mid to high teens

So, as a margin, we feel that is going to be in mid to high teens.

— Atul Lall
Overall Margins (at ₹1 lakh crore sales) Margin · Medium confidence 4-4.5%

So, my sense is it should be very difficult to say, but, yes, the range can be somewhere around 4%, 4.5%.

— Saurabh Gupta
Overall Margins Uptick Margin · Medium confidence 70-80 bps

So, around 70, 80 bps uptick.

— Atul Lall

Sales

Overall Sales Sales · next three to four years · High confidence ₹1 lakh crore

We feel confident about it. [referring to 1 lakh crore sales in 3-4 years]

— Atul Lall

What to watch in Q3 FY26

Longcheer JV Facility Operationalization

April '26

Current New 400,000 sq ft facility under construction

Target Operational

Why it matters

This JV is key for smartphone capacity expansion and captive consumption, contributing to mobile segment growth.

We have received the PN3 approval for 74:26 joint venture with Longcheer and have finalized a new 400,000 square feet facility for the JV, which is expected to be operational by April '26

Risks & concerns

Demand deferral due to GST rate reduction
medium

GST rate reduction in mid-August led to significant postponement of purchases across trade and consumer channels, specifically impacting TVs, refrigerators, and washing machines in Q2 FY26.

Management acknowledged
Demand deferral due to new energy efficiency norms
medium

Introduction of new and more stringent energy efficiency norms in India led to postponement of refrigerator purchases.

Management acknowledged
Potential margin pressure from mobile PLI expiry
medium

If mobile PLI expires on March 31, 2026, there could be margin pressure for a couple of quarters in FY27 before backward integration benefits (display, camera modules) fully kick in.

Analyst acknowledged

Q&A highlights

4 direct, 1 evasive

New ODM customer in mobile phone segment Partial

So, let's say, we are in discussions with a large ODM for the smartphone. And we are expecting that this business should start by end of Q4 of this fiscal or early Q1 of next fiscal. The expected volumes are in the range of around 0.5 million per month. That is the volume we are looking at. As far as more detailed, granular level details of ODM, it is not prudent at this time to share.

Analyst sought more details on a new significant mobile ODM customer, indicating a new growth avenue, but management was cautious about sharing granular information, suggesting competitive sensitivity.

Asked by Aditya Bhartia

Telecom business growth and export opportunity Direct

So, we have been able to secure an order with a U.S.-based company, which is into radios. And the pilot is going to be done by December, and the commercial production should start by March. And by Q2 or Q3 of next fiscal, the exports are going to start. So, initially, this business, I feel is going to be around $150 billion (Market size). That is the new category. On an overall basis, we feel that in couple of years, this business should be somewhere around close to $1 billion.

Management detailed a significant strategic shift into complex network equipment with a US partner, projecting substantial growth and export potential, positioning telecom as a major future driver.

Asked by Aditya Bhartia

Mobile PLI scheme extension and FY27 margin pressure Partial

So, there are some discussions which have started between the government and the stakeholders for giving additional support to mobile sector. However, it is at a very preliminary stage. But what you are saying is right, the discussions have been initiated. ... So, yes, there can be some pressure for a couple of quarters in '27.

Analyst probed potential margin impact if mobile PLI expires. Management confirmed preliminary discussions for extension but acknowledged possible short-term margin pressure in FY27, highlighting a key regulatory risk.

Asked by Achal

Discrepancy in mobile volume guidance for next year Partial

Are we sort of slightly, because I think last time we discussed, we had targeted between 60 to 65. So, are we sort of slightly cautious in terms of ramp up? And are we seeing any impact from the exports markets as well in terms of demand? ... No. I am not seeing any cut or anything, but what I am just putting across to you is a particular rate. One still maintains somewhere between 60 to 65 something like that. Yes.

Analyst questioned a seemingly lower mobile volume guidance for next year. Management clarified it's an aspirational range and the higher end (60-65M) is still maintained, suggesting conservative communication rather than a downgrade.

Asked by Siddhartha Bera

Nature of non-operating income increase Direct

So, Sonali, basically, there are mark-to-market income, over 6.5% stake in Aditya Infotech, which is now a listed company. So, the market cap as on 30th September into 6.5% stake is what we have valued that. So, we have initially valued at a particular value, but now the value is established because it is a listed company. So, for the last one year, we have been booking that mark-to-market. So, now a large part of that mark-to-market has come up in September 2, and we have to continuously now depending on how that, how the market cap of that company behaves, we have to do it every quarter.

Analyst inquired about a sharp rise in non-operating income. Management clarified it was a mark-to-market gain from a listed equity stake, confirming it's a non-recurring item for the adjusted core performance.

Asked by Sonali Salgaonkar

Promoter shareholding and potential further dilutions Direct

So, if you see the combined shareholding of promoter and the family and myself is more than 42%. Second, we don't see any more dilutions happening, and that is it.

Analyst raised concerns about continuous promoter share selling. Management provided a clear statement on combined promoter holding and explicitly ruled out further dilutions, addressing investor anxiety about commitment.

Asked by Rahul Agarwal

Confidentiality of anchor client revenue percentage Evasive

That we generally don't, yes, we don't share. ... That's confidential information, and we don't share that.

Analyst asked for the percentage of revenue from anchor clients. Management declined to share, citing confidentiality, which indicates the sensitivity and potential concentration risk associated with key customers.

Asked by Vaishnavi Gurung

Long-term sales target of ₹1 lakh crore and associated margins Direct

So, I mean, you haven't given any formal guidance, but to an interview to CNBC, you had mentioned that you will be targeting around 1 lakh crore of sales in next three to four years. I mean, is it possible to do that? ... We feel confident about it. ... So, around 70, 80 bps uptick. ... 4%, 4.5%.

Analyst pressed on the ambitious 1 lakh crore sales target. Management reiterated confidence and provided a long-term margin outlook of 4-4.5%, offering a clear vision for future scale and profitability.

Asked by Omkar

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Detailed narrative

Strong Q2 FY26 Performance Despite Headwinds

Dixon Technologies reported robust Q2 FY26 results with consolidated adjusted revenues growing 29% YoY to INR 14,858 crores, compared to INR 11,528 crores last year. Consolidated adjusted EBITDA increased by 34% YoY to INR 564 crores, up from INR 420 crores, while PAT grew 27% to INR 323 crores. This strong performance was achieved despite temporary demand deferrals in TVs, refrigerators, and washing machines during mid-August and September due to GST rate reductions and new energy efficiency norms.

Mobile & EMS Segment Leads Growth and Expansion

The Mobile and EMS segment was a primary growth driver, reporting a 41% YoY revenue increase to INR 13,361 crores and a 53% rise in operating profit to INR 472 crores. This segment includes significant contributions from telecom (INR 1,635 crores), IT hardware (INR 331 crores), and hearables/wearables (INR 207 crores). The company has secured PN3 approval for a 74:26 JV with Longcheer, with a new 400,000 sq ft facility expected to be operational by April 2026, and is in active discussions with another large ODM for smartphones, targeting manufacturing commencement by Q4 FY26 or early Q1 FY27.

Aggressive Backward Integration and Strategic JVs

Dixon is strategically deepening its manufacturing capabilities through backward integration and new joint ventures. Key initiatives include a 74:26 JV with HKC for display modules, aiming for 24 million smartphone and 2 million notebook units annually, with plans to expand to 60 million smartphones and foray into LED TV and automotive displays. The company also acquired a 51% stake in Q Tech India for camera and fingerprint modules, projecting revenue growth from INR 2,000 crores to INR 6,000-7,000 crores in 2-3 years. An investment of approximately INR 3,000 crores over the next three years is committed to components ECMS applications.

Telecom Segment Emerges as Key Growth Driver

The Telecom and Networking products segment demonstrated exceptional growth, with revenues surging 148% YoY to INR 1,635 crores. Management highlighted a significant order from a leading U.S. Telecom customer for telecom backhaul microwave radios, with pilot production scheduled for December and commercial production by March 2026. This breakthrough into complex network equipment is expected to contribute significantly to revenues, with the segment potentially reaching $1 billion in revenue within a couple of years, positioning it as the second largest growth driver after mobile.

IT Hardware and Appliances Expansion

The IT hardware segment recorded a remarkable 481% YoY revenue growth to INR 331 crores. A 60:40 JV with Inventec Corporation of Taiwan for notebook PCs, servers, and components is finalized and expected to be operational by Q1 next fiscal, targeting INR 4,000-5,000 crores in revenue in the next two years. In home appliances, new products like 16kg/18kg semi-automatic washing machines and robo vacuum cleaners are slated for launch by December 2025, alongside capacity expansions and new product introductions in refrigerators.

Confident in Long-Term Vision and Margin Expansion

Management expressed strong confidence in achieving an ambitious sales target of INR 1 lakh crore within the next three to four years, projecting an overall margin uptick of 70-80 bps to 4-4.5%. This growth will be fueled by continued expansion in mobile volumes (targeting 55-60 million units next year), the new telecom and IT hardware businesses, and margin-accretive backward integration into components. The company maintains a healthy financial position with a negative 6-day working capital cycle and a net debt of INR 203 crores, supported by adequate internal cash flows for planned growth.

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