Dixon Technologies (India) Limited — Q4 FY26 earnings call

Call held 12 May 2026

Management summary

Dixon Technologies reported a strong FY26 with 26% revenue growth, reaching ₹48,893 crores, and healthy profit growth. Q4 revenues, however, were flat due to macroeconomic headwinds and input cost inflation. The company is aggressively expanding capacities and diversifying into high-margin specialty EMS, while navigating margin pressures from the ending PLI scheme in mobile manufacturing.

Highlights

  • Strong full-year revenue growth of ₹48,893 crores, a 26% increase over FY25.

  • Healthy full-year EBITDA (excl. exceptional gain) growth of ₹1,887 crores, up 23% YoY.

  • Robust full-year PAT (excl. exceptional gain) growth of ₹845 crores, up 20% YoY.

  • Excellent capital efficiency with ROCE of 44.8% and ROE of 28.1%, alongside a negative working capital cycle of 8 days.

  • Significant capacity expansion underway for camera modules (70M to 180-190M units) and new display module JV commencing trials in Q3 FY27.

  • Telecom & Networking products segment targeting ₹7,500-8,000 crores revenue in FY27, up from ₹5,000 crores in FY26.

Concerns

  • Q4 revenues remained flat due to geopolitical concerns, softer consumer demand, inventory rationalization by brands, and elevated input costs, particularly impacting smartphone and IT hardware segments.

  • Margin pressure anticipated in the mobile segment due to the PLI scheme ending, though partly offset by operational efficiency and backward integration.

  • Inflationary pressure from memory chips and semiconductor-linked inputs continues to affect electronics industries.

Key financials

2 periods

Q4 FY26

  • Revenue
    ₹10,520 Cr
  • EBITDA (excl. exceptional gain)
    ₹418 Cr
  • PAT (excl. exceptional gain)
    ₹192 Cr

FY26

  • Revenue
    ₹48,893 Cr
    YoY +26%
  • EBITDA (excl. exceptional gain)
    ₹1,887 Cr
    YoY +23%
  • PAT (excl. exceptional gain)
    ₹845 Cr
    YoY +20%
  • ROCE
    44.8%
  • ROE
    28.1%
  • Working Capital Cycle
    -8 days

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 (Q4 FY26)
₹10,511 Cr Total
  • Mobile and other EMS ₹9,485 Cr 90.2%
  • Consumer Electronics (LED TV and Refrigerators) ₹697 Cr 6.6%
  • Home Appliances ₹329 Cr 3.1%

Capital allocation

  • Capex ₹1,058 Cr balance sheet and the cash accruals are adequate to support this expansion
    • Display capacity
    • IT business expansion
    • Camera module capacity and deepening manufacturing
    As far as the absolute number is concerned, it will be in the similar range. And the balance sheet and the cash accruals are adequate to support this expansion.
  • M&A Specialty EMS inorganic opportunities Acquisition · Announced

    To build scaled specialty high-margin EMS business, including M&A opportunities focused on aerospace, defense, automotive, medical and industrial verticals.

    Each opportunity scalable to INR3,000-4,000 crores with significantly higher operating margins.

    Already on the table, there are a couple of serious inorganic opportunities across the verticals that I had mentioned in my opening remarks. So we have not budgeted any numbers out of these opportunities as of now in '26, '27, but we feel that something substantive, at least a couple of them is going to happen in the current fiscal.
  • Liquidity Liquidity disclosed Generated free cash of INR700-plus crores after capex of almost INR1,058 crores, indicating strong cash flow generation and a very strong balance sheet.
    So see, we have really focused on our balance sheet strength. And in spite of a sluggish business environment, we have generated after doing a capex of almost INR1,058 crores, a free cash of INR700-plus crores. The ROCE is 44.8% and working capital operating cycle is negative 8 days. So that way, the balance sheet is very strong for triggering any kind of growth.

Guidance & targets

Revenue

  • Overall Revenue Growth (without Vivo) Revenue · FY27 · Medium confidence 15% to 17%
    We feel that without the Vivo also, the company will keep growing at almost 15% to 17%.

    — Atul Lall

  • Overall Revenue (without Vivo) Revenue · FY27 · Medium confidence INR56,000 crores
    Next year, we are targeting almost INR56,000 crores without the Vivo numbers, and mobile volume being flat.

    — Atul Lall

  • IT Products Revenue Revenue · FY27 · High confidence more than INR4,000 crores
    And we feel that our revenue in this fiscal is going to be more than INR4,000 crores.

    — Atul Lall

  • Camera Module Revenue Revenue · FY27 · High confidence almost INR2,500 crores
    We are targeting a revenue of almost INR2,500 crores in that business.

    — Atul Lall

  • Telecom & Networking Revenue Revenue · FY27 · High confidence INR7,500-8,000 crores
    We are targeting almost INR7,500 crores, INR8,000 crores in '26, '27.

    — Atul Lall

  • Lighting Revenue Revenue · FY27 · High confidence almost INR1,700 crores
    The next year target is almost INR1,700 crores.

    — Atul Lall

  • Display Module JV Revenue Revenue · once 80-90% capacity utilization · Medium confidence INR5,500-6,000 crores
    the revenue target, once we start achieving 80% to 90% of the capacity utilization, the revenue generation is going to be almost INR5,500 crores to INR6,000 crores with a double-digit margin.

    — Atul Lall

Volume

  • Mobile Volumes (excl. Vivo) Volume · FY27 · Medium confidence similar to 32 million units
    We feel that the overall volumes without Vivo is going to be almost similar, okay?

    — Atul Lall

  • Mobile Volumes (incl. Vivo) Volume · annualized basis · Medium confidence additional 20-22 million units
    Another 20 million, 22 million units can be added on an annualized basis.

    — Atul Lall

  • Feature Phone Exports (Ismartu) Volume · FY27 · Medium confidence almost 50 million units
    So that number will take us up to almost 50 million units.

    — Atul Lall

  • Mobile PLI 2 Exports Volume · FY27 · Low confidence additional 4-5 million units
    If that happens, then I see that beyond Vivo and beyond Ismartu, another 4 million to 5 million units can be added.

    — Atul Lall

  • Smartphone Volume Growth Volume · quarter-on-quarter · Medium confidence high-double-digit growth
    we expect a high-double-digit growth quarter-on-quarter in the smartphones volume

    — Atul Lall

Capacity

  • Camera Module Capacity Capacity · next 15 to 18 months · High confidence 180-190 million units annually

    From 70 million units annually today

    We will be expanding the capacities of camera module and a subsidiary Q Tech, which is an ECMS beneficiary for smartphones from 70 million units annually to around 180 million units to 190 million units annually over the next 15 to 18 months

    — Atul Lall

  • Display Module JV Mobile Capacity Capacity · next 2 years · High confidence 50-55 million units

    From 24 million units today

    As I've shared, finally, the capacity buildup for mobile over the next 2 years is going to be from 24 million to almost 50 million, 55 million.

    — Atul Lall

Margin

  • Display Module JV Margin Margin · High confidence mid-teens
    We feel that it should be double-digit margin. Yes, it should be in mid-teens.

    — Atul Lall

  • Overall Margin Expansion Margin · when component play is completely deployed · Medium confidence 40 bps, 50 bps
    But finally, when the component play is completely deployed, there will be a margin expansion from last year's number by almost 40 bps, 50 bps.

    — Atul Lall

Profitability

  • Overall Absolute Profitability Profitability · FY27 · High confidence rise
    Yes, absolute profitability will rise.

    — Atul Lall

Realization

  • Smartphone Selling Price Growth Realization · Medium confidence 12% to 15%
    along with growth in selling prices by 12% to 15%.

    — Atul Lall

Growth

  • IT Hardware Growth Growth · FY27 · High confidence 3x growth
    we expect 3x growth in the revenues in the current fiscal against last year

    — Atul Lall

Specialty EMS

  • Specialty EMS Business Scalability Specialty EMS · Medium confidence INR3,000-4,000 crores
    each would be -- I mean, the combined opportunities which come in are going to be at least scalable to the size of INR3,000 crores to INR4,000 crores with a significantly higher operating margins

    — Atul Lall

What to watch in Q1 FY27

Vivo JV approval status

next quarter
Current Deeply engaged with government, very close to it
Target Approval received and volumes added

Why it matters

Vivo JV is a major trigger for adding 20-22 million mobile units annually, significantly impacting overall revenue growth.

As far as Vivo is concerned, we are deeply engaged with the government. We feel that we are very close to it. And that's where the status is. I reiterate that we feel that we are very, very close to it.

Risks & concerns

  • Geopolitical concerns

    medium

    Led to flat Q4 revenues and disruption across supply chains, freight, energy, forex, and commodity prices.

    Management acknowledged

  • Softer consumer demand

    medium

    Contributed to flat Q4 revenues, particularly impacting smartphone and IT hardware segments.

    Management acknowledged

  • Inventory rationalization by brands

    medium

    Affected Q4 revenues as brands adjusted inventory levels.

    Management acknowledged

  • Elevated input costs (memory chips, semiconductors)

    medium

    Caused inflationary pressure in key components, leading to cautious procurement behavior and impacting Q4 revenues.

    Management acknowledged

  • PLI scheme ending for mobile manufacturing

    medium

    Will cause margin pressure in the mobile segment, though partly offset by operational efficiency and backward integration.

    Management acknowledged

  • Delays in Vivo government approval

    medium

    Impacted mobile segment growth, with the company actively engaged with the government for resolution.

    Management acknowledged

Q&A highlights

8 direct
Mobile volumes ramp-up, growth drivers, Vivo JV, IT hardware, display JV, camera module, telecom, lighting targets for FY27. Direct
So on an annualized basis, 67% of what Vivo said and last year, Vivo sold almost 35 million units. Another 20 million, 22 million units can be added on an annualized basis. So that's the number. ... IT products, the business looks very healthy. ... we feel that our revenue in this fiscal is going to be more than INR4,000 crores. ... In our camera module acquisition of Q Tech, we are expanding capacity from present 70 million units to 80 million units to almost 190 million units. ... We are targeting a revenue of almost INR2,500 crores in that business. ... The other triggers of growth, the telecom network business is doing extremely well. ... We are targeting almost INR7,500 crores, INR8,000 crores in '26, '27. ... The next year target is almost INR1,700 crores.

Provides a comprehensive overview of specific growth drivers and numerical targets across multiple key segments for the upcoming fiscal year.

Asked by Pankaj Tibrewal

Mobile segment volume vs value growth and impact of ASP increase. Direct
So we expect Pankaj to that the revenue growth should be at least 12% to 15% higher, if not more. ... And once the Vivo thing comes into the system, then we are hoping that the selling prices would be better than our existing weighted average selling price of the current portfolio.

Clarifies that revenue growth in mobile will outpace volume growth due to higher Average Selling Prices (ASPs), indicating a shift in value realization.

Asked by Pankaj Tibrewal

Impact of PLI scheme ending on mobile profitability and margin sustainability. Direct
Obviously, there is a margin pressure because of the PLI going away. A part of it is getting compensated through the enhanced operational efficiency. And the balance part of it is going to start kicking in with the backward integration piece of camera modules and display.

Addresses a key investor concern about the sustainability of mobile segment margins post-PLI, outlining mitigation strategies through efficiency and backward integration.

Asked by Aditya Bhartia

Details on specialty EMS opportunities (aerospace, defense, automotive) - size and timeline for M&A. Direct
Already on the table, there are a couple of serious inorganic opportunities across the verticals that I had mentioned in my opening remarks. So we have not budgeted any numbers out of these opportunities as of now in '26, '27, but we feel that something substantive, at least a couple of them is going to happen in the current fiscal. ... We feel that each would be -- I mean, the combined opportunities which come in are going to be at least scalable to the size of INR3,000 crores to INR4,000 crores with a significantly higher operating margins.

Highlights a new strategic growth area with high-margin potential, indicating active pursuit of inorganic opportunities and significant scale targets.

Asked by Aditya Bhartia

Roadmap for mobile phone exports, including feature phones and smartphones, and impact of PLI 2. Direct
So Aditya, we are well, we have had deep discussions with our partner and starting with feature phones with Ismartu, the smartphone exports is also going to be initiated. Of course, the Motorola relationship for export is going to get a flip after the PLI 2.

Outlines the company's export strategy for mobile phones, detailing specific partners and the potential boost from PLI 2 for global markets.

Asked by Aditya Bhartia

Long-term mobile volume growth strategy beyond current capacity and market share. Direct
So we feel undoubtedly that there is a significant potential for exports. One is that. The second is we need to work upon getting a larger share of market of existing brand itself. A couple of relationships, we feel there is still a potential for increasing the share of the wallet. ... And next is bringing in one more acquisition of a large customer.

Addresses the long-term growth sustainability in the mobile segment, focusing on exports, increasing wallet share with existing customers, and potential new customer acquisitions.

Asked by Indrajit Agarwal

Impact of memory chip pricing and ASP increase on mobile demand vs. production. Direct
So due to the kind of relationships that we have as far as the mobile phones customers and principles are concerned, we are able to ensure the supply chain smoothness. So I'm not seeing any shortage due to which the business is getting impacted. But definitely, there is a cost increase. But there is no impact on production.

Clarifies that while higher input costs are impacting consumer demand, the company's strong relationships ensure production is not affected by supply shortages.

Asked by Indrajit Agarwal

Overall FY27 revenue and margin outlook. Direct
Next year, we are targeting almost INR56,000 crores without the Vivo numbers, and mobile volume being flat. If Vivo comes in, then it's a very major trigger. We feel that without the Vivo also, the company will keep growing at almost 15% to 17%. ... So the margin profile will be slightly under pressure this year because the PLI has gone off, and there is a lag in the margin accretion happening due to component foray. But finally, when the component play is completely deployed, there will be a margin expansion from last year's number by almost 40 bps, 50 bps. ... Yes, absolute profitability will rise.

Provides a clear financial outlook for FY27, including revenue targets, expected growth rates, and a detailed explanation of the anticipated margin trajectory and absolute profitability.

Asked by Bharat Shah

3 min read 6 chapters

Detailed narrative

Q4 FY26 and Full Year FY26 Performance Overview

Dixon Technologies reported Q4 FY26 revenues of INR10,520 crores, with EBITDA (excluding exceptional gain) at INR418 crores and PAT at INR192 crores. For the full fiscal year FY26, revenues grew 26% year-on-year to INR48,893 crores, up from INR38,880 crores in FY25. EBITDA for FY26 increased 23% to INR1,887 crores, and PAT rose 20% to INR845 crores. Q4 revenues remained flat due to geopolitical concerns, softer consumer demand, and elevated input costs, particularly impacting the smartphone and IT hardware segments.

Capital Efficiency and Balance Sheet Strength

The company demonstrated strong capital efficiency, achieving a Return on Capital Employed (ROCE) of 44.8% and Return on Equity (ROE) of 28.1%. Despite incurring a capital expenditure of almost INR1,058 crores in FY26, Dixon generated over INR700 crores in free cash. The working capital cycle remained negative at 8 days, indicating robust cash flow generation and a strong balance sheet capable of supporting future growth initiatives.

Mobile and IT Hardware Segment Outlook

For FY27, mobile volumes (excluding the potential Vivo JV) are expected to remain similar to the 32 million units achieved in FY26, with revenue growth projected to be 12-15% higher than volume due to increased Average Selling Prices. If the Vivo JV materializes, an additional 20-22 million units could be added annually. The IT hardware segment is poised for significant growth, targeting over INR4,000 crores in revenue for FY27, representing a 3x increase from the previous year, driven by new capacities and strong customer order books.

Backward Integration and Localization Initiatives

Dixon is aggressively expanding its camera module capacity from 70 million units to 180-190 million units annually over the next 15-18 months, targeting INR2,500 crores in revenue for FY27. The display module JV with HKC is on track, with construction completed and machinery installation ongoing; trials are expected to begin in Q3 FY27, and mass production by end of Q3/beginning of Q4 FY27. This facility will support 24 million mobile displays and 2.4 million automotive/IT product displays, with mobile capacity scaling to 50-55 million units over two years, aiming for INR5,500-6,000 crores revenue at double-digit margins. SSD manufacturing is slated to commence in Q2 FY27.

Diversification into Specialty EMS and Other Segments

The company is strategically venturing into high-margin specialty EMS, identifying five micro-verticals, including aerospace, defense, automotive, medical, and industrial. Management anticipates a couple of serious inorganic opportunities in this fiscal year, with each potentially scaling to INR3,000-4,000 crores at significantly higher operating margins. The Telecom & Networking business is projected to grow from INR5,000 crores in FY26 to INR7,500-8,000 crores in FY27. The Lighting JV with Signify is also expected to double its revenue to INR1,700 crores in FY27.

FY27 Overall Guidance and Margin Outlook

For FY27, Dixon targets an overall revenue of approximately INR56,000 crores (excluding Vivo), representing a 15-17% growth. The margin profile is expected to be 'slightly under pressure' in FY27 due to the cessation of PLI benefits in the mobile segment. However, management projects that 'absolute profitability will rise' in FY27. A margin expansion of 40-50 basis points from FY26 levels is anticipated when the component play, particularly display modules, is fully deployed in FY28.

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