Dixon Technologies Initiating Coverage - MarketsMojo.com
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
Initiating Coverage
Dixon Technologies
16 OCT 2019
16 OCT 2019 Company Report
Buy
Target Price: Rs 3,649
CMP : Rs. 3,005
Potential Upside : 21%
MARKET DATA
No. of Shares (Cr) : 1.13
Market Cap (Rs Cr) : Rs. 3,395
Dixon Technologies
Free Float : 56%
Avg. daily vol (6mth) : 6526
52-w High / Low : 3230/1831
Bloomberg : DIXON IN
Sector: Consumer Durables
Promoter holding : 38.92%
FII / DII : 7.23%/ 22.38 %
Powering Durable Brands
Price performance
120
80
40
Jul-18 Dec-18 May-19 Oct-19
BSE Sensex Dixon Technolog.
Financial Summary (Consolidated) Shareholding pattern
Y/E Net Sales EBITDA PAT EPS Change P/E RoE Core RoCE EV/EBITDA Jun-19 Q-o-Q Chg
March (Rs Cr) (Rs Cr) (Rs Cr) (Rs) (%) (x) (%) (%) (x)
Promoters 38.92 (0.01)
FY18 2,853 112 61 54.8 26.5 61.1 23.7 34.9 32.8 FIIs 7.23 1.19
FY19 2,984 135 63 55.9 2.1 42.1 18.2 27.4 19.5 MFs / UTI 22.29 (1.43)
FY20E 3,868 181 98 86.6 54.7 34.7 22.9 28.6 18.6 Banks / FIs 0.09 0.05
FY21E 4,754 227 129 114.0 31.7 26.4 24.0 30.4 14.5 Others 31.47 0.2
Source: Company, Axis Securities CMP as on Oct 16, 2019
Hiren Trivedi - CM Research
| hiren.trivedi@axissecurities.com | (+91 22 4267 1759)
2
16 OCT 2019 Company Report
Dixon Technologies
Investment Rationale Sector: Consumer Durables
Dixon Technologies (Dixon) is a leading manufacturer of products for consumer durable brands in India. It has ~9.3% share in
Electronic Manufacturing Services providing cost efficient, end to end solutions to MNC’s and domestic OEM’s. Dixon’s products
include (i)consumer electronics - LED TVs, (ii) home appliances - Washing Machines, (iii) lighting products - LED bulbs (iv) mobile
phones and (v) CCTV & DVR. The company also provides repairs and refurbishment services through its Reverse logistics segment.
Dixon is a leading player in Flat Panel Display (FPD) TV with 50%+ market share; in LED Lighting it accounts for ~35%+ domestic
volumes and commands 40%+ share in the Washing Machines EMS market. Its key customers include Panasonic, Philips Lighting
India, Xiaomi, Samsung, Flipkart, Crompton Greaves Consumer Electricals, Lloyds, Haier, Reliance Retail, Wipro, Syska, Polycab
and Bajaj Electricals.
We expect revenues/earnings to grow at CAGR of 26% / 42.8% respectively over FY19-21E driven by
Higher contribution from
Faster adoption of consumer Strong growth led by backward
Increasing EMS opportunities FPD TV, Lighting & Washing
durables by younger population integrated cost effective
across segments and higher Machines segments; recovery in
propelled by increase in manufacturing and diverse
share of ODM revenues Mobiles and strong growth in
disposable income product offerings
Security Systems
We initiate coverage with “BUY” rating and a target price of Rs 3,649 i.e. 21% upside (implies 32x FY21E)
* OEM / OEM – Original Equipment Manufacturer / Original Design Manufacturer | EMS – Electronic Manufacturing Services
3
16 OCT 2019 Company Report
Dixon Technologies
Investment Rationale Sector: Consumer Durables
Higher growth in global and domestic CEA market
Indian CEA (Consumer Electronics and Appliances) market is expected to grow at a faster pace of ~19% CAGR between FY19-21E while
the global CEA market is expected to grow at a CAGR of ~8% between FY18-24E
Global *EMS/^ODM market is expected to grow at CAGR of 8.5% between FY19-21E, while India’s EMS/ODM segment is expected to
grow at 32.4% CAGR in the same period as many OEM’s outsource their manufacturing requirements in line with their strategy of keeping
asset light business model
High growth in consumer electronics and increasing EMS presents a huge opportunity for players like Dixon
Increasing trend towards ODM manufacturing augur well for Dixon
Dixon, a cost efficient solution provider and a leader in ODM segment is well equipped to capitalize on rising OEM’s demand for ODM
Company’s ODM share increased from ~15% in FY17 to 38% in FY19 owing to its focus on developing value added products for its
customers (20+ ODM products developed)
ODM business fetches ~200-300 bps higher margins than OEM business; EBITDA Margins expanded by 92 bps over FY17-FY19
In Home Appliances ODM share continues to be 100%, in lighting its ODM revenue stood at 71% (vs. 40% in FY18), and Consumer
Electronics ODM share is 9% (vs. 6% in FY18) which is likely to improve further as Dixon has converted large customer Panasonic from
prescriptive mode to ODM mode
^ODM =Original Design Manufacturer |*EMS – Electronic Manufacturing Services
4
16 OCT 2019 Company Report
Dixon Technologies
Investment Rationale Sector: Consumer Durables
Backward integration- improving cost efficiencies & enhancing product offerings
Developed capability in manufacturing critical components, thereby strengthening relationship with customers
Reduced dependency on third party suppliers leading to cost efficiencies
Increased number of product offerings within key segments like LED lighting, washing machines and FPD TV
Ability to provide value added ODM solutions to clients, thus leading to improved margins in key segments
Governmental thrust on domestic manufacturing
Local manufacturing to get a boost from Government steps to promote India as hub for innovation, design and manufacturing
Setting up port-based electronic manufacturing clusters to support local manufacturing and exports
Governments thrust on Electricity For All is expected to provide an impetus for increasing demand for consumer durables in rural and semi-
urban areas
Government push for energy efficient products via Domestic Efficient Lighting Programme (DELP), UJALA have resulted in higher demand
for lighting segment
The recent customs duty increase on CCTV cameras/DVR’s to 20% from 15% will promote local manufacturing and discourage imports
5
16 OCT 2019 Company Report
Dixon Technologies
Investment Rationale… Sector: Consumer Durables
Cost advantage over China
India’s labour cost at $1.7/hour is almost half vis-à-vis China at $3.3/hour making India an attractive manufacturing destination
China is witnessing sharp increase in labour cost as workers focus on highly skilled jobs resulting in lack of manpower at low end of
manufacturing value chain
Indian manufacturing costs to moderate due to economies of scale, government support (SLNP, Customs duty, Subsidies) and availability of
skilled & semi-skilled manpower
Strong client relationships, Acquisition of new customers
Dixon has strong relationship with existing customers, for e.g. half-a decade with Panasonic, almost 10 years with Philips
Similar to global EMS peers Dixon derives higher revenue share from anchor customers, however its constant endeavour is to acquire new
customers through new segments and increase offerings within existing segments (e.g. in Lighting segment its anchor customer Philips now
contributes ~45% to the segment revenues vs. ~90% earlier)
Recent client additions (during FY19) include Xiaomi, Panasonic-Anchor, Syska, Samsung, Flipkart, Crompton Greaves Consumer Electricals,
Lloyds, Wipro
6
16 OCT 2019 Company Report
Dixon Technologies
Investment Rationale… Sector: Consumer Durables
Leading EMS solutions provider
Dixon is a leading player in Flat Panel Display (FPD) TV with 50%+ market share, in LED Lighting it accounts for ~35%+ domestic volumes
and commands 40%+ share in the Washing Machines EMS market.
Proximity of manufacturing plants to OEM’s, end to end services including ODM solutions, cost efficient production along with reverse
logistics has led to Dixon becoming a preferred EMS partner with strong client relationships
Key customers include Panasonic, Philips Lighting India, Xiaomi, Samsung, Flipkart, Crompton Greaves Consumer Electricals, Lloyds, Haier,
Reliance Retail, Wipro, Syska, Polycab and Bajaj Electricals
Cost efficient manufacturing with lean working capital management
Optimum utilisation of assets :Flexible manufacturing lines with standardised equipment used for diverse products has led Dixon to derive
benefits of scale while remaining asset light leading to cost efficiencies
Lean working capital : Dixon has maintained lean working capital despite increasing product offerings within segments and addition of new
product segments due to efficient inventory management and favourable credit terms from suppliers
New client addition along with capex and expenditure related to ramp up in capacities to led to stretching of working capital in FY19
Improved collections and efficient inventory management along with asset light nature of the business will allow Dixon to maintain lean
working capital days going forward
7
16 OCT 2019 Company Report
Dixon Technologies
Higher growth opportunity led by strong domestic CEA market Sector: Consumer Durables
Growth of Indian CEA market Indian CEA market to grow at faster pace
Global demand for consumer electronics goods is set to grow
FY21E due to:
Innovative product offerings leading to faster replacement
FY20E of consumer goods
Adoption of smart technologies integrated into the product
FY19 Proliferation of e-commerce
The global consumer electronics market was valued at $
FY18 1,172 bn in 2017 as per Zion Market Research, is expected
(Rs bn)
to touch $1,787 bn by 2024 at CAGR of 6%.
FY17 Global consumer electronics growth is expected to be driven
by increasing demand from Smartphone, Television, DVD
FY16 Players, Refrigerators, Washing Machines, Digital Cameras,
and Hard Disk Drives
FY15 Indian CEA market grew at CAGR of ~14% between FY13-
FY19, is expected to grow faster at CAGR of 19% between
FY14
FY19-21E, from Rs 4,178 bn in FY2019 to Rs 5,940 bn in
FY2021E due to
FY13
Increasing working population
Early adoption of consumer goods
0 2,000 4,000 6,000 8,000
Easy availability of finance
Total CEA Market Consumer Electronics Appliances
Source: Company, Axis Securities
8
16 OCT 2019 Company Report
Dixon Technologies
Indian EMS/ODM growth to outpace Global EMS/ODM growth Sector: Consumer Durables
Global EMS/ODM Market by Value Indian EMS/ODM Market by Value
800 10.0
670 8.1
700 615
569 8.0
600 502 532 6.1
455 478
500 436 444 6.0 4.7
($ bn)
($ bn)
400 3.8
4.0 3.0
300 2.2
1.6 1.9
200 2.0 1.4
100
0.0
0
FY13
FY14
FY15
FY16
FY17
FY18
FY19
FY20
FY21
FY13
FY14
FY15
FY16
FY17
FY18
FY19
FY20
FY21
Global EMS/ODM market to grow at CAGR of 8.5% between
OEM’s preference for strategic tie-up with EMS players like
FY19-21E led by OEM’s focus on : Dixon to meet domestic demands will lead Indian EMS/ODM
Differentiation via new product innovation market to grow at robust 32.4% during FY19-21E
Brand building India’s EMS market is just 0.6% of the global EMS market and
Marketing and distribution is expected to reach 1.6% by CY2021, aided by
Global EMS market growth will be driven by higher electronics Rising per capita income and affluent middle class
consumption by end user industries like IT & Telecom, Consumer Increasing nuclear families
Enhanced features and availability of finance leading to early
Electronics, Automotive, Healthcare and Industrial.
adoption of consumer electronics
Top categories that are expected to drive Indian EMS segment Make In India thrust
are Mobile phones, Telecom, Consumer electronics and Subsidies and incentives by central/state governments
Appliances Rationalisation of duties and taxes
Dixon being the 2nd largest EMS company to benefit from robust growth in domestic EMS demand
Source: Company, Axis Securities 9
16 OCT 2019 Company Report
Dixon Technologies
Enhancing capabilities through backward integration Sector: Consumer Durables
Segment Backward Integration Advantage - Dixon Segments Key Products offerings
Plastic moulding, Increased capacity will cater
Home Appliances LED TV’s–19’’to 65’’& 4K2K technology, Home Theatres– 2.1&
panels, control table, to 33% of the Indian Market Consumer Electronics
( Washing Machines) 4.1channel, FPD, Smart TVs
twin tubs, Motors requirement, Value Addition
Increased ODM share to
Sheet metal, plastic LED Lights, Ballast, Tube lights, Batten, Down lighters, CFL/LED
Lighting 90%, led to customer Lighting Products
moulding and wound Drivers
( LED bulbs, battens ) additions, enabled providing
components
end to end solutions
Became largest LED TV Mfg Home Appliances Semi-automatic washing machine ranging from 6.2kg to 8.2kg
Backlight units, plastic in India, capacity can cater
Consumer Electronics
moulding, circuits, to 26% of Indian market Mobile Phones Feature & smart phones (2G, 3G, 4G/LTE, VoLTE & CDMA)
(FPD TV's)
LCM, SMT needs, Improvement in
Margins Security Systems CCTV Cameras, DVRs
Critical components that
Mobile Phones Repair –mobile phones, LCD/LED TVs, LED panel, home theatre,
PCB Manufacturing contributes to ~50% of the Reverse Logistics
( Feature & Smart phones) computer peripherals and other devices
value addition in a phone
Strategic product portfolio diversification
CFL Lighting, Washing CCTV,
Colour TV
Reverse logistics Machines Digital Video Recorder
2017
1994 2007 2008 2010 2010 2016
LCD TV LED TV Mobile Phones
1016 OCT 2019 Company Report
Dixon Technologies
Dixon’s manufacturing strength in key segments Sector: Consumer Durables
Dixon manufactures majority of end product components Dixon is able to offer cost effective solutions due to:
in-house : Backward Integrated manufacturing
60% of LED Lamps (components like Circuits & Plastic moulded parts) Flexible manufacturing lines used for diverse products with
50% of Washing Machines standardised equipment
32% of LED TV’s Economies of scale
Availability of skilled man power
Domestic Domestic/
Dixon Dixon Imported
Imported/ Dixon
Domestic
10% Imported 12% 12% Imported 10%
30% 10%
11%
5% Semi Automatic
30% LED Lamps LED TV 50%
9% Washing
Machines
25%
56%
30%
Circuit Plastics LED Others Circuit Plastics BLU LED Glass Others Plastic Parts Electronic motor Gear Box Timers Others
1116 OCT 2019 Company Report
Dixon Technologies
Well diversified leading EMS player Sector: Consumer Durables
Dixon’s market leadership in key segments Key EMS players and their offerings
EMS Market Focus &
Segment Companies Offerings Products
Share Competence
Consumer Electronics (FPD TV's) 50% +
Global companies
Lighting (LED Lights - volumes) 35%+
Home Appliances (Semi Automatic Washing Machines) 40%+ S/w Develop, Global & Indian Mobiles, Set top
Jabil,
product design, market - technical - Boxes, Telecom
Foxconn, Flex ,
Level of diversification – Dixon vs. Peers Sanmina , Wistron
prototyping, SMT, High Value add solutions, PC's,
PCBA, logistics products Desktops
Washing Lighting
LED TVs Mobile
Machine products
Large Indian Companies
Dixon Tech High High High Medium
ELIN India - - Low -
H/w design, S/w Mobile, Lighting
NTL, SFO Techno.,
MEPL Low develop, assembly, Domestic market - Products, Medical
ELIN , PG Group,
prototyping & Value add products & Defence,
DetlaLight - - Medium - Kaynes, Dixon
testing WM,FPD TV’s
Opetiemus - - - High
NTL Small Indian Companies
- - Medium -
electronics
Noble Low Medium - - SGS Tekniks, Local markets & LED Lighting ,
Sheet metal, plastic
Amara Raja exports medical electronics,
Videotex Medium - - - moulding,
Electronics, Hical -Low value HUPS systems,
transformers
Tech products inverters
Vimal Plast - Low - -
Source: Company, Axis Securities
Dixon’s leadership in key segments stems from integrated manufacturing capabilities across its business segments.
1216 OCT 2019 Company Report
Dixon Technologies
Governmental thrust on Domestic Manufacturing Sector: Consumer Durables
Make In India Ease of doing business - Aiding FDI Inflows
*M-SIPS: capital subsidy of 20% in SEZ (25%-non SEZ areas) India is among the top 10 countries globally, showing
Electronics manufacturing clusters: Financial assistance of up to improvement in World Bank’s ease of doing business index
50% and 75% of project cost for setting manufacturing clusters jumping 23 notches to 77th place in 2019
Preferential market access: government to prefer domestically
manufactured products FDI inflows in electronics in India increased 2.3X in 2018-19 at
Phased Manufacturing program: Government providing tax $ 451.9 mn vs.$196.9 mn in 2017-18 led by initiatives like
reliefs and rationalisation of customs duty
National Policy on Electronics - $400 bn turnover in domestic 100% FDI in Electronics Systems design & manufacturing sector -
electronics manufacturing by CY2025 automatic route
Promote EMS activities such as engineering and design of
PCBs, PCB assembly 100% FDI In contract manufacturing -automatic route
Led Lighting – lighting up manufacturing in India Rationalization of duties & taxes – a shot in the arm
With energy saving as objective, under #SNLP over 85.67 lakh Cut in duty of Open Cell to 0% from 5% - to promote local
street lights in 1400 cities across India have been replaced as manufacturing of LED TV’s
of July 2019 – aim to replace 1.34 cr street lights
Customs duty hike on Washing Machines (less than 10 kg) from
Under ^UJALA scheme total 34.76 crore LEDs distributed to
10% to 20% will make domestic production competitive
rural households through EESL –target of 77 cr LED lights to be
distributed going forward Customs duty increase on CCTV cameras/DVR’s to 20% from
Subsidies, incentives led to reduction in price of 9W led bulb to 15%, will promote local manufacturing and discourage imports
~Rs 70 vs Rs 160 thus prompting higher adoption aided by Reduction of Corporate Tax rate to 22% (15% for new units)
power for all initiative of government
Local production +demand generation+ attracting capital = Growing opportunities for Dixon
*Modified Special Incentive Package Scheme(M-SIPS) ^ UJALA- Unnat Jyoti by Affordable LEDs for All,#SLNP - Street Light National Programme
1316 OCT 2019 Company Report
Dixon Technologies
Labour cost advantage to aid local manufacturing Sector: Consumer Durables
India’s labour cost is among lowest in the world Indian manufacturing costs to moderate due to economies of
50 scale, government support (SLNP, Customs duty, Subsidies)
40.5 China’s salaries, since 2013 have risen between 21% to 41% in
38.0 its manufacturing hubs and expected to increase further due
40
worker’s preference for hi-tech jobs
(USD/hr)
30 24.0 India is better placed to attract OEM’s as China’s cost to rise due
20.7 to withdrawal of subsidies, shift to higher level jobs and higher
20 rate of increase in labour costs
9.4 Low cost of production in India will incentivize brands to
10
3.3 1.7 manufacture locally/depend on domestic manufacturers
0 Dixon is well placed to cater to brands being an end-to-end cost
efficient solutions provider in FPD TV’s, LED Lamps & Washing
US Germany Japan S.Korea Taiwan China India
Machines segment
Labour and Overheads cost differentials favour manufacturing in India Increasing Average Manufacturing wages in China
20 19% 80000
16.5%
72,088
*LOH as % of total cost
15 13% 13% 60000
12.5%
64,452
12%
(CNY/Year)
59,470
55,324
10
51,369
40000
46,431
41,650
36,665
5
30,700
20000
26,599
0
FY14 FY17 FY21E
0
India China 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Source: Deloitte Global Manufacturing Competitiveness Index 2016 ,National Bureau of Statistics China, Company , Axis Securities.,*LOH = Labour & Overheads
1416 OCT 2019 Company Report
Dixon Technologies
Lower Penetration & Low localization –huge opportunity Sector: Consumer Durables
Penetration of Consumer Durables Huge potential for higher penetration
100% 89% 85% Government’s thrust on Electricity For All is expected to provide an
80% 70% impetus for increasing demand in rural and semi-urban areas
60%
60% Easy availability of credit, increasing urbanisation, will lead to higher
demand
40% 30%
25% TV industry in India is estimated to grow from Rs 660 bn in CY2017 to
17% 20%
20% 10% reach Rs 862 bn in CY2020
4%
0% Dixon has the largest TV manufacturing capacity in India at 36 lakh TV
Washing FPD TV Room AC Air Cooler Refrigerator sets per anum
Machine Large opportunity for EMS players like Dixon in under penetrated
India Global
segments like Washing Machines (60% scope) and FPD TV’s (~30%
scope)
Localization levels in appliances
Increased scope for localization
Washing Machine 65 Rising cost of imports (increased customs duties) to push brands to
35
increase their localization content to fulfil growing demand for consumer
FPD TV 30
70 goods
90 Lower cost, end to end solutions, innovative product offerings, value
Air Coolers
10 added aftermarket services to aid higher localization
Residential ACs 65 Dixon better placed than peers to capitalize on growing localization
35
needs of customers due to
Refrigetaor 70
30 Leading EMS manufacturer in three segments
0 20 40 60 80 100 Fungible manufacturing capabilities across segments
Fully backward integrated facility
Localisation levels in Appliances Import
Strong R&D capabilities to offer innovative value added solutions
Source: Company, Axis Securities
1516 OCT 2019 Company Report
Dixon Technologies
Rising affluence - driver of increasing consumption Sector: Consumer Durables
Increasing per capita income leading to higher discretionary spends Key Drivers of Demand
3500 65% of the consumer durables demand comes from first time
3000 buyers as per industry reports
Rising affluent middle class population is estimated to form ~69%
3,023
2500
2,791
2,578
of total population by 2020
(In USD)
2,379
2000
2,199
2,036
1500 2,014 Changing lifestyle causing early adoption of white goods in young
1,762
1,640
1,610
1000 population, a strong demand generator
500 Increasing Per Capita Income in India leading to higher spends on
0 aspirational goods including consumer durables like FPD TV’s,
CY 14 CY 15 CY 16 CY 17 CY 18 CY 19E CY 20E CY 21E CY 22E CY 23E Washing Machines and Mobile phones
Source: IMF
Wide spread affluence to drive consumer
spending across India
Elite and affluent households—will become
the largest combined segment by 2025,
accounting for 40% of consumption
compared with 27% in 2016
The number of cities having greater than
40% elite and affluent households will
increase to 48 in 2025 (vs. Nil in 2016)
while cities having 21-40% elite and affluent
households will increase to 270 in 2025
( vs. 64 in 2016)
Source: BCG Centre for Customer Insight
1616 OCT 2019 Company Report
Dixon Technologies
Company Profile Sector: Consumer Durables
Dixon Technologies started manufacturing operations in the year 1994
with production of colour TVs
Has over the years evolved into fully integrated end-to-end product and
solution provider to OEM’s ranging from global sourcing,
manufacturing, quality testing and packaging to logistics Dehradun (4 Units)
Diversified into 5 segments like LED TV, Smart TV, LED bulbs & Tube Noida (4 Units)
lights, down lighters, Semi-Automatic Washing machines, Feature
phones & Smart Phones, CCTV camera’s & DVR’s, with various offerings
in each segment
Dixon has 10 state of the art manufacturing facilities supported by 3
R&D centres (2 in India and 1 in China) that focus on value addition to
its products
Strategic location of plants:
Near customer’s facility ensuring prompt response to clients manufacturing Tirupati (2 Units)
requirements Manufacturing Units
In proximity to Chennai & Krishnapatman ports - ability to cater to South East
Head Office
Asian markets through exports
Having flexible and cost efficient manufacturing capabilities with
availability of skilled and unskilled manpower
Plant Location Products manufactured currently Year Estb Focus on making Tirupati a mother plant
Noida-I LED bulbs, LED drivers, PCB assembly of Airconditionals 1996 Area 12 acres, 2 lakh sq feet construction space
Noida-II Mobile phones 2016 Focus Product & Geographical expansion
Noida-III Reverse logistics, LED Bulbs 2009 Benefits SGST exemption for 8 years (refund method)
Noida-IV LED bulbs and parts 2009 Subsidies on land rent, electricity & water
Proximity to Chennai port ( ~ 136 kms)
Dehradun - I facility LED bulbs, Battens, T-LEDs, Down Lighter, Ballast, etc. 2007
Dehradun - II facility Semi -automatic washing machines 2010 Products LED TV’s; Dixon expanded capacity from 2.4 mn to 3.4 mn p.a
CCTV’s capacity 6 lakh per month
Backward integration of plastic parts,Sheet metal DVR’s capacity 1.5 lakh per month
Dehradun - III facility 2009
components
Dehradun -IV facility Washing Machines 2018 Planned
Fully Automatic Washing Machine line with 5 lakh units annually
Tirupati LED TVs; Security systems (CCTVs, DVRs) 2017 Expansion
Source: Company, Axis Securities
1716 OCT 2019 Company Report
Dixon Technologies
Management Team Sector: Consumer Durables
♦ Has more than 2 decades of experience in the EMS industry. He has held positions like chairman of the
Sunil Vachani,
Executive Chairman Electronics and Computer Software Export Promotion Council of India and Co-Chair of the CII ICTE
Committee. He is currently the vice president of CEAMA
Atul B. Lall, ♦ 26+ years of experience in the EMS industry; significant contribution to the overall growth of the Company
Managing Director and successful completion of IPO, he is responsible for company’s overall business operations
Saurabh Gupta, ♦ Over 17 years of experience in finance & strategy. He is associate of the ICAI & an MBA from MDI,
Chief Financial Officer Gurgaon. Honored with Business World-Yes Bank most promising Future CFO in Large Corporate category
Mr. Vineet Kumar Mishra, ♦ Over 22 years experience in the manufacturing industry; worked with Samsung India, Hotline Witties
President - COO Lighting Electronics and Onida Savak
♦ Around 3 decades of experience in factory operations, manufacturing, supply chain, global sourcing, and
Mr. Pankaj Sharma,
business development. Has worked with Bestavision Electronics, Samsung, Jain Tube Company , Bigesto
President - COO Mobile Phone
Foods, Satkar Exports,Shirllon
♦ More than 30 years of experience in the field of plastics moulding. He has worked with Dipty Lal Judge
Mr. Rajeev Lonial,
Mal, Noble Moulds, Evershine Moulding, Ever Shine Plastic Industries, Essen Fabrication & Engineering and
President COO Washing Machine
Shree Krishna Keshav Lab
♦ He has a rich and extensive experience of 28+ years of across Manufacturing, Technology, Business
Mr. Abhijit Kotnis,
Development and sourcing fields. He was associated with Videocon Group for close to three decades in
President COO Television
various roles
Source: Company, Axis Securities
1816 OCT 2019 Company Report
Dixon Technologies
Key clients across various segments Sector: Consumer Durables
Segments Key Clients
Consumer Electronics
Lighting Products
Home Appliances
Mobiles
Security Systems
1916 OCT 2019 Company Report
Dixon Technologies
Consumer Electronics Sector: Consumer Durables
FPD TV market (mn units) EMS Opportunity in FPD TV
30 12.5
26.2 10.8
25 10.0
(mn Units)
(mn Units)
20 17 7.5
15
5.0 4.2
10
5
5 2.5
0.1
0 0.0
FY13 FY18 FY21E FY13 FY18 FY21E
Replacement demand, multiple TVs in household and upgradation to Consumer Electronics segment revenue growth
new features is expected to drive FPD TV market growth at CAGR of
15.5% in volume terms and 14.3% CAGR in value terms between 1600
FY18-21E
OEMs focus on marketing & rural penetration will lead the EMS/ODM 1,194
segment in consumer electronics industry to grow at a CAGR of 37% 1200 1,073
thus providing huge opportunity to Dixon
845
(Rs Cr)
Dixon is the leader in FPD TV ODM segment with 50%+ share, while 776 770
800 698
the nearest competitor’s share stands at ~ 8%
Further the contract with Xiaomi to manufacture TV’s is expected to
drive revenues in the consumer electronics segment going forward.
400
We expect revenues to grow at 14% CAGR and stable margins
between FY19-21E
The key brands catered to by Dixon include Xiaomi, Panasonic, Marq, 0
Koryo, Lloyd, TCL, Philips etc. FY14 FY15 FY16 FY17 FY18 FY19
Source: Company, Axis Securities , LCM = Liquid Crystal Monitor , SMT= Surface Mount Technology
2016 OCT 2019 Company Report
Dixon Technologies
Lighting Products Sector: Consumer Durables
LED Lighting volume growth As per TechSci, the Lighting products market in India is expected to
1600 1482 grow at CAGR of 24.6% during CY2016- CY2022 touching $ 3.76 bn
The demand for LED is expected to be driven by:
Increasing adoption due energy savings & longer life of LED lighting vis-
1200
(mn Units)
a-vis incandescent lighting
Government initiatives like Unnat Jyoti by Affordable LEDs for All (UJALA)
800 664 scheme, Street lighting National Program (SLNP) – for replacing old
bulbs by LED lights
400 Higher adoption due to increasing affordability as EESL offers subsidy on
LED lights to the end customer
67
The EMS/ODM segment is expected to grow at a CAGR of 43.9% in
0
FY13 FY18 FY21E
value terms thus providing huge opportunity to Dixon
Dixon caters to major brands in the lighting segment viz Panasonic – Lighting Products segment revenue growth
Anchor, Bajaj, Wipro, Syska, Usha, Polycab, Jaguar, C&S, RR Cables,
Luminous 1000 919
Dixon’s capacity of 20 mn bulbs p.m can cater to ~54% of Indian 774
market requirement 800
Dixon is among the top 5 global manufacturers in terms of scale in LED
Bulbs 600 551
(Rs Cr)
Dixon caters to 90% of Philips lighting requirements –it is also planning 430
to increase the relationship and supply LED’s for exports 400 308 301
71% of Dixons revenues are on ODM basis vs. just 4% in FY14
200
Dixon witnessed margin improvement from 3.1% in FY17 to 7.18% in
FY19 due to innovative product offering and increase in ODM share
0
We expect revenues to grow at 19%CAGR and margins the range of
7.2-7.3% between FY19-21E FY14 FY15 FY16 FY17 FY18 FY19
Source: Company, Axis Securities
2116 OCT 2019 Company Report
Dixon Technologies
Home Appliances Sector: Consumer Durables
Washing Machine market growth As per Frost & Sullivan Report semi-automatic washing machine
12 dominates the category with 56% volume market share
9.9
10 Dixon having dominant market share in EMS is better placed to cater
to global brands which may not have semi-automatic washing machines
(mn Units)
8 6.5 in their product portfolio
6 With a strategy to drive top-line and margin growth Dixon plans to
3.8 manufacture fully automatic washing machines adding to product
4
diversification
2
The key brands serviced by Dixon for semi-automatic washing machine
0 include Samsung, Panasonic, Godrej, Marq, Koryo, Thomson, Akai etc.
FY13 FY18 FY21E
Increasing product awareness, rising rural penetration (first time Home Appliances Revenues witnessed steady growth
buyers), affordable pricing and availability of finance to drive washing
machines market growth at a CAGR of 15.1% in volume terms to 9.9 400 374
mn units and 16.3% CAGR to Rs 163.7 bn in value terms between
FY19-21E
300
More companies opting for outsourcing to cater to local market & 250
exports will lead to EMS/ODM segment growth at CAGR of 41%
(Rs Cr)
between FY19-21E 188
200
Dixon derives 100% revenues from Washing Machines on an ODM 131
basis and offers the largest bouquet of ODM models in WM segment 107
100 85
Dixon is the leader in Semi Automatic Washing Machine EMS market
with ~42% share
0
We expect revenues to grow 13% CAGR with improvement in margins
between FY19-21E FY14 FY15 FY16 FY17 FY18 FY19
Source: Company, Axis Securities
2216 OCT 2019 Company Report
Dixon Technologies
Mobiles Sector: Consumer Durables
Mobile Phone contribution in overall electronics production in India Increasing domestic production & declining imports of mobile sets
400 2,000
2014-15 2018-19
300 1,500
(Mn units)
Contribution 9.93% 37.12%
(Rs bn)
200 1,000
Number of Mobile Assembly Plants 2 270 100 500
0 0
PMP by the government revived mobile phone manufacturing after shut 2015 2016 2017 2018 2019
down of Nokia plant in 2014
Imports ( In mn units) Production (In mn units)
Domestic production of mobile phones increased 5x volume wise and
Imports (Rs bn) Domestic Production (Rs bn)
~9.6x value wise between 2015-2019 while Imports declined from
216 mn units to just 20 mn
India is currently the 2nd largest smart phone handset manufacturing
Mobile Phones segment revenues to recover
country after China 1000
811
Smart phone users to double in India (829 mn by 2022) and feature 800
phone sales to reach 1bn globally, with higher demand from India 670
presents huge opportunity for players like Dixon
600
(Rs Cr)
Dixon’s acquisition of balance 50% in Padget Technologies(JV partner)
400 355
along with backward integration in mobile PCB’s will enable it to cater
to growing opportunity
200
We expect mobile segment revenues to grow at 32% CAGR during
20
FY19-21E led by recovery in the segment and acquisition of new
0
clients
FY16 FY17 FY18 FY19
Source: Company, Axis Securities, PMP = Phase Manufacturing Program
2316 OCT 2019 Company Report
Dixon Technologies
Security Systems (CCTV & DVRs) Sector: Consumer Durables
As per I.H.S market study the organized market for surveillance Key Demand Drivers
equipment was ~Rs 3500 cr in CY2017 and expected to touch
Rs 5,000cr – Rs 6000 cr in CY2020 led by increasing use of Increasing safety & surveillance measures being adopted by:
surveillance technologies in prevention and detection of theft & crime Government
Dixon entered security cameras and surveillance systems segment in Corporations
FY2018 as JV manufacturer with Aditya Infotech
Educational Institutes
Aditya Infotech owns CP Plus cameras and is also a distributor for
Chinese brand Dahua Technology (largest surveillance brands Residential associations & individuals
globally) Declining prices of electronic security systems
Dixon’s Security Systems segment witnessed robust growth during
FY18-19 and is expected to witness strong growth with improved Installation of surveillance by governments at public places
margins
Security Systems segment witnessed robust revenue growth Market for surveillance equipment
8000
120 112
6000
6000
80
3500
(Rs Cr)
(Rs Cr)
4000
49
40
2000
0
0
2017 2020
FY18 FY19
Source: ICEA, Axis Securities
2416 OCT 2019 Company Report
Dixon Technologies
Reverse Logistics – maintaining customer stickiness Sector: Consumer Durables
Reverse Logistics segment accounted for ~1% of revenues in FY19
OEMs prefer EMS players with end to end solutions including reverse logistics for after sales services , repairs & refurbishment
Reverse Logistics is an important end-customer support function
Dixon provides B2B reverse logistics for Set Top Boxes, Mobile Phones and LED TV panel, CCTVs through 17 service centres spread across different
states in India
Reverse logistics is supported by R&D team giving the company an advantage for repairs & refurbishment of Mobile phones, LED TV’s and products
like STB’s and Computer peripherals unlike competition
Return rates of Mobiles (9%), FPD TV (8%), washing machines (8%), STB’s (16%), will lead to growth of the reverse logistics with increasing sales of
these products
Reverse Logistics Market Share of products in Reverse logistics Market
70 30
60 25
(Vol mn units)
50 34.1
30.4 20
40 27.4 16.1
13.6
(Rs bn)
25.4 15
30 23.9 11.3
10
20
10 9.4
17.6 19.1
7.9 7.9
10 5 2.9 3.4
1.8 2.1 2.5
0.9 1.4
0 0
FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY13 FY14 FY15 FY16 FY17 FY18 FY19
Computer Peripherals WM FPD TV Set Top Boxes Mobile Phones Computer Peripherals WM FPD TV Set Top Boxes Mobile Phones
Source: Company, Axis Securities
2516 OCT 2019 Company Report
Dixon Technologies
SWOT Analysis Sector: Consumer Durables
Strength Opportunities
An EMS supplier with leadership in Low penetration of consumer
3 fast growing segments durables in India
Strong & sticky customer
Increasing localization due to Make
relationships
in India, inherent cost advantage
Economies of Scale Opportunities Increasing demand for EMS
Cost efficiencies due to backward services
integration
Strategy of growing ODM revenues
Strong R&D capabilities, developed
20+ ODM solutions
SWOT
Strength Weaknesses
Threats
Threats
Weaknesses
Brands resorting to in house
production Client concentration, dependence
on anchor customers
Increase in competition
Relatively lower bargaining power
Higher imports by OEMs in OEM business
Source: Company, Axis Securities
2616 OCT 2019 Company Report
Dixon Technologies
Robust growth in key segments to drive profitability Sector: Consumer Durables
Segment wise revenue Break-up Segment wise EBITDA contribution
4,754
5,000
300
3,868
4,000 227
2,890 2,984 200 181
3,000 2,457
135
(Rs bn)
(Rs bn)
91 112
2,000 100
1,000
0
0
FY17 FY18 FY19 FY20E FY21E
FY17 FY18 FY19 FY20E FY21E -100
Consumer Electronics Lighting Products Home Appliances Consumer Electronics Lighting Products Home Appliances
Mobile Phones Reverse Logistics Security Systems Mobile Phones Reverse Logistics Security Systems
Segment wise Margins
Key segments viz Consumer Electronics(40% FY19 revenues), Lighting
25.0 (31% FY19 revenues) and Home Appliances (13% FY19 revenues) to
20.0 continue contributing to top-line growth going forward
15.0
Operating efficiencies along with backward integration will lead to
10.0
higher contribution of operating profits by key segments
(%)
5.0
0.0 We expect increasing contribution to top-line from mobile segment led by
-5.0 growth recovery aided by cost effective backward integration
-10.0
Security systems is expected to grow faster (on a low base) with
FY17 FY18 FY19 FY20E FY21E
increasing revenue share and improved margins
Consumer Electronics Lighting Products
Home Appliances Mobile Phones Reverse logistics, a strategic offering to maintain stickiness of OEMs, is
expected to return to positive EBITDA with improved margins
Reverse Logistics Security Systems
2716 OCT 2019 Company Report
Dixon Technologies
Higher margin on increasing ODM support robust revenue growth Sector: Consumer Durables
Healthy top line growth Strong growth in EBITDA
5,000 4,754
250 4.8 6.0
3,868 4.5 4.7
4,000 200 4.2 3.9
3.7
2,853 2,984 4.0
3,000 2,499 150 2.6 181 227
2.5 2.3
2,000 1,410 100 135
1,119 1,220 112 2.0
816 91
1,000 50
59
20 26 32
0 0 0.0
FY16
FY18
FY13
FY14
FY15
FY17
FY19
FY20E
FY21E
FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20E FY21E
Net Sales ( Rs Cr) EBITDA ( Rs cr) EBITDA (%)
Increasing ODM share in revenues aid margin expansion… We expect top line to grow at a CAGR of 26 % between FY19-21E, on
strong growth in key segments Consumer Electronics, Lighting and Home
100
Appliances and new client additions across segments backed by rising
80 wallet share with existing customers
62 Additionally, we expect mobile segment to return to growth path, with
(%)
60 78 73 77
85 top-line CAGR of ~32% between FY19-21E led by company’s efforts to
40 add new popular clients
Security Systems segment to post robust growth going forward
20 38
22 27 23 contributing ~7% of top-line from current ~3.8% led by growing
15
0 demand for surveillance equipments
FY15 FY16 FY17 FY18 FY19 We expect EBITDA margins to improve driven by higher cost efficiencies
ODM Revenue Share OEM Revenue Share and growing share of ODM revenues
Source: Company, Axis Securities
2816 OCT 2019 Company Report
Dixon Technologies
Astute working capital management with superior returns profile Sector: Consumer Durables
PAT to grow at CAGR of 42.8% Lean working Capital days
150
129 25
98 20
20 19 18
100
61 63 14 13
15
43 47 10 10 10
50 10 7
14 12
5 5
0
FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20E FY21E 0
FY13
FY14
FY15
FY16
FY17
FY18
FY19
FY20E
FY21E
PAT (Rs Cr)
Improving return ratios superior earnings trajectory
New Client addition led to stretching of working capital in FY19 which
50.0
is expected to improve going forward
40.0 Improved collections and efficient inventory management along with
asset light nature of the business will allow Dixon to maintain lean
30.0 working capital days going forward
The recent government announcement of reduction in corporate tax
20.0
rate is expected to bring down effective tax rate positively impacting
10.0 EPS & Bottom line by ~9%.
With superior earnings growth led by strong order book and focus on
0.0 acquiring new clients we expect Dixon to report strong revenue
FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20E FY21E growth.
We expect PAT to grow at CAGR of ~42.8% between FY19-FY21E
RoE (%) Core RoCE (%)
Source: Company, Axis Securities
2916 OCT 2019 Company Report
Dixon Technologies
Valuations Sector: Consumer Durables
P/E band Valuation
6000 We estimate Dixon Technologies to post topline CAGR of 26%
and bottom-line CAGR of 42.8% over FY19-FY21E
4000
We expect EBITDA margins to improve from 4.5% in FY19 to
2000 4.8% in FY21E due to operating leverage
0 ROE is estimated to increase to 24% in FY21E from 18.2% in
FY19, while Core ROCE is expected to increase to 30.4% from
Mar-18
Mar-19
Jul-18
Jul-19
Sep-17
Nov-17
Sep-18
Jan-18
May-18
Nov-18
Jan-19
Sep-19
May-19
27.3% in FY19 driven by improved business performance
Price 5x 10x 15x 20x
We value Dixon Technologies at 32x FY21E EPS as we expect it
to report Revenue/EBITDA/PAT CAGR of 26%/30%/42.8%
12mth fwd P/E (x) respectively over FY19-21E and thus arrive at a price target of
100 Rs 3,649 ( 21% Upside)
80
60
Risk Factors
40
20
Volatility in raw material prices
Competition from domestic and overseas players
0
Forex volatility
Mar-18
Mar-19
Sep-17
Jul-18
Jul-19
Nov-17
Sep-18
Nov-18
Sep-19
Jan-18
Jan-19
May-18
May-19
Customers resorting to higher in-house manufacturing
PE Mean Mean+1Stdev Mean-1Stdev Change in government policies
Source: Company, Axis Securities
3016 OCT 2019 Company Report
Dixon Technologies
Financials (Consolidated) Sector: Consumer Durables
Profit & Loss (Rs Cr) Balance Sheet (Rs Cr)
Y/E March FY18 FY19 FY20E FY21E Y/E March FY18 FY19 FY20E FY21E
Net sales 2,853 2,984 3,868 4,754
Other operating income 0.0 0.0 0.0 0.0 Total assets 363 535 616 731
Total income 2,853 2,984 3,868 4,754 Net Block 179 241 264 293
Cost of goods sold 2,741 2,850 3,687 4,526 CWIP 12.8 18.8 30.0 32.5
Contribution (%) 3.9% 4.5% 4.68% 4.78% Investments 17.2 9.7 9.7 9.7
Advt/Sales/Distrn O/H 0.0 0.0 0.0 0.0
Wkg. cap. (excl cash) 110 229 256 275
Operating Profit 112 135 181 227
Cash / Bank balance 44.1 36.7 56.6 120.6
Other income 4 6 5 7
Misc. Assets 0.0 0.0 0.0 0.0
PBIDT 116 141 186 234
Depreciation 15 22 26 34
Interest & Fin Chg. 13 25 26 24 Capital employed 363 535 616 731
E/o income / (Expense) 0 0 0 0
Equity capital 11.3 11.3 11.3 11.3
Pre-tax profit 88 94 134 177
Tax provision 27 30 36 48 Reserves 304 367 462 589
PAT befor Comprehensive Income 61 63 98 129
Pref. Share Capital 0.0 0.0 0.0 0.0
(-) Minority Interests 0 0 0 0
Minority Interests 0.0 0.0 0.0 0.0
Associates 0 0 0 0
Other Comprehensive Income (0.1) (0.1) 0.0 0.0 Borrowings 44 141 136 123
Adjusted PAT 60.8 63.3 98.0 129.1
Reported PAT 61 63 98 129 Def tax Liabilities 4.1 16.0 6.7 7.9
Source: Company, Axis Securities
3116 OCT 2019 Company Report
Dixon Technologies
Financials (Consolidated) Sector: Consumer Durables
Cash Flow (Rs Cr) Ratio Analysis (%)
Y/E March FY18 FY19E FY20E FY21E Y/E March FY18 FY19E FY20E FY21E
Sales growth 14.2 4.6 29.6 22.9
Sources 83 96 117 158
Cash profit 89 110 150 186 OPM 3.9 4.5 4.7 4.8
Oper. profit growth 22.8 20.4 34.2 25.5
(-) Dividends 0 3 3 3
COGS / Net sales 96.1 95.5 95.3 95.2
Retained earnings 89 107 147 184 Overheads/Net sales 0.0 0.0 0.0 0.0
Depreciation / G. block 7.4 7.5 7.6 8.4
Issue of equity 0.3 0.0 0.0 0.0
Change in Oth. Reserves 55.9 2.7 0.0 0.0 Net wkg.cap / Net sales 0.04 0.07 0.07 0.07
Net sales / Gr block (x) 13.9 10.3 11.5 11.9
Borrowings (2) (2) 5 (3)
Others (60) (12) (36) (22) Core RoCE 34.9 27.4 28.6 30.4
Debt / equity (x) 0.13 0.36 0.28 0.20
Effective tax rate 31.0 32.5 27.0 27.0
Applications 83 96 117 158 RoE 23.7 18.2 22.9 24.0
Payout ratio (Div/NP) 0.0 4.3 2.7 2.1
Capital expenditure 4.5 94.6 60.0 65.0
Investments 28.3 (11.0) 0.0 0.0 EPS (Rs.) 54.8 55.9 86.6 114.0
EPS Growth 26.5 2.1 54.7 31.7
Net current assets 21.5 20.0 36.8 29.3
CEPS (Rs.) 67.1 75.0 109.2 143.7
Change in cash 28.8 (7.4) 19.9 64.0 DPS (Rs.) 0.0 2.0 2.0 2.0
Source: Company, Axis Securities
3216 OCT 2019 Company Report
Dixon Technologies
Disclaimer Sector: Consumer Durables
Disclosures:
The following Disclosures are being made in compliance with the SEBI Research Analyst Regulations 2014 (herein after referred to as the Regulations).
1. Axis Securities Ltd. (ASL) is a SEBI Registered Research Analyst having registration no. INH000000297. ASL, the Research Entity (RE) as defined in the Regulations, is engaged in the business of
providing Stock broking services, Depository participant services & distribution of various financial products. ASL is a subsidiary company of Axis Bank Ltd. Axis Bank Ltd. is a listed public
company and one of India’s largest private sector bank and has its various subsidiaries engaged in businesses of Asset management, NBFC, Merchant Banking, Trusteeship, Venture Capital,
Stock Broking, the details in respect of which are available on www.axisbank.com.
2. ASL is registered with the Securities & Exchange Board of India (SEBI) for its stock broking & Depository participant business activities and with the Association of Mutual Funds of India (AMFI) for
distribution of financial products and also registered with IRDA as a corporate agent for insurance business activity.
3. ASL has no material adverse disciplinary history as on the date of publication of this report.
4. I/We, Hiren Trivedi– CM, Research, MBA (Finance) author/s and the name/s subscribed to this report, hereby certify that all of the views expressed in this research report accurately reflect
my/our views about the subject issuer(s) or securities. I/We (Research Analyst) also certify that no part of my/our compensation was, is, or will be directly or indirectly related to the specific
recommendation(s) or view(s) in this report. I/we or my/our relative or ASL does not have any financial interest in the subject company. Also I/we or my/our relative or ASL or its Associates may
have beneficial ownership of 1% or more in the subject company at the end of the month immediately preceding the date of publication of the Research Report. Since associates of ASL are
engaged in various financial service businesses, they might have financial interests or beneficial ownership in various companies including the subject company/companies mentioned in this
report. I/we or my/our relative or ASL or its associate does not have any material conflict of interest. I/we have not served as director / officer, etc. in the subject company in the last 12-month
period.
Any holding in stock – No
5. ASL has not received any compensation from the subject company in the past twelve months. ASL has not been engaged in market making activity for the subject company.
6. In the last 12-month period ending on the last day of the month immediately preceding the date of publication of this research report, ASL or any of its associates may have:
i. Received compensation for investment banking, merchant banking or stock broking services or for any other services from the subject company of this research report and / or;
ii. Managed or co-managed public offering of the securities from the subject company of this research report and / or;
iii. Received compensation for products or services other than investment banking, merchant banking or stock broking services from the subject company of this research report;
ASL or any of its associates have not received compensation or other benefits from the subject company of this research report or any other third-party in connection with this report.
Term& Conditions:
This report has been prepared by ASL and is meant for sole use by the recipient and not for circulation. The report and information contained herein is strictly confidential and may not be altered in
any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent of ASL. The report is based on the
facts, figures and information that are considered true, correct, reliable and accurate. The intent of this report is not recommendatory in nature. The information is obtained from publicly available
media or other sources believed to be reliable. Such information has not been independently verified and no guaranty, representation of warranty, express or implied, is made as to its accuracy,
completeness or correctness. All such information and opinions are subject to change without notice. The report is prepared solely for informational purpose and does not constitute an offer document
or solicitation of offer to buy or sell or subscribe for securities or other financial instruments for the clients. Though disseminated to all the customers simultaneously, not all customers may receive this
report at the same time. ASL will not treat recipients as customers by virtue of their receiving this report.
Instead of a company visit, we have done a conference call with the company’s management.
3316 OCT 2019 Company Report
Dixon Technologies
Disclaimer Sector: Consumer Durables
Disclaimer:
Nothing in this report constitutes investment, legal, accounting and tax advice or a representation that any investment or strategy is suitable or appropriate to the recipient’s specific circumstances.
The securities and strategies discussed and opinions expressed, if any, in this report may not be suitable for all investors, who must make their own investment decisions, based on their own
investment objectives, financial positions and needs of specific recipient.
This report may not be taken in substitution for the exercise of independent judgment by any recipient. Each recipient of this report should make such investigations as it deems necessary to arrive at
an independent evaluation of an investment in the securities of companies referred to in this report (including the merits and risks involved), and should consult its own advisors to determine the merits
and risks of such an investment. Certain transactions, including those involving futures, options and other derivatives as well as non-investment grade securities involve substantial risk and are not
suitable for all investors. ASL, its directors, analysts or employees do not take any responsibility, financial or otherwise, of the losses or the damages sustained due to the investments made or any
action taken on basis of this report, including but not restricted to, fluctuation in the prices of shares and bonds, changes in the currency rates, diminution in the NAVs, reduction in the dividend or
income, etc. Past performance is not necessarily a guide to future performance. Investors are advice necessarily a guide to future performance. Investors are advised to see Risk Disclosure Document
to understand the risks associated before investing in the securities markets. Actual results may differ materially from those set forth in projections. Forward-looking statements are not predictions and
may be subject to change without notice.
ASL and its affiliated companies, their directors and employees may; (a) from time to time, have long or short position(s) in, and buy or sell the securities of the company(ies) mentioned herein or (b)
be engaged in any other transaction involving such securities or earn brokerage or other compensation or act as a market maker in the financial instruments of the company(ies) discussed herein or
act as an advisor or investment banker, lender/borrower to such company(ies) or may have any other potential conflict of interests with respect to any recommendation and other related information
and opinions. Each of these entities functions as a separate, distinct and independent of each other. The recipient should take this into account before interpreting this document. The Research reports
are also available & published on AxisDirect website.
ASL and / or its affiliates do and seek to do business including investment banking with companies covered in its research reports. As a result, the recipients of this report should be aware that ASL
may have a potential conflict of interest that may affect the objectivity of this report. Compensation of Research Analysts is not based on any specific merchant banking, investment banking or
brokerage service transactions. ASL may have issued other reports that are inconsistent with and reach different conclusion from the information presented in this report.
Neither this report nor any copy of it may be taken or transmitted into the United State (to U.S. Persons), Canada, or Japan or distributed, directly or indirectly, in the United States or Canada or
distributed or redistributed in Japan or to any resident thereof. If this report is inadvertently sent or has reached any individual in such country, especially, USA, the same may be ignored and brought
to the attention of the sender. This report is not directed or intended for distribution to, or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other
jurisdiction, where such distribution, publication, availability or use would be contrary to law, regulation or which would subject ASL to any registration or licensing requirement within such
jurisdiction. The securities described herein may or may not be eligible for sale in all jurisdictions or to certain category of investors.
The Disclosures of Interest Statement incorporated in this document is provided solely to enhance the transparency and should not be treated as endorsement of the views expressed in the report. The
Company reserves the right to make modifications and alternations to this document as may be required from time to time without any prior notice. The views expressed are those of the analyst(s)
and the Company may or may not subscribe to all the views expressed therein.
Copyright in this document vests with Axis Securities Limited.
Axis Securities Limited, Corporate office: Unit No. 2, Phoenix Market City, 15, LBS Road, Near Kamani Junction, Kurla (west), Mumbai-400070, Tel No. – 022 – 4050 8080 / 022 6148 0808,
Regd. off.- Axis House, 8th Floor, Wadia International Centre, Pandurang Budhkar Marg, Worli, Mumbai – 400 025. Compliance Officer: Anand Shaha, Email: compliance.officer@axisdirect.in,
Tel No: 022-42671582. SEBI-Portfolio Manager Reg. No. INP000000654
34You can also read
