Dixon Tech shares rise with Vivo partnership
Experts predict the partnership will strengthen Dixon's market leadership
1Partnership approval boosts shares
Dixon Technologies shares rose 4% after Vivo Mobile India received government approval for the joint venture. The partnership will focus on smartphone production for Vivo in India. Experts anticipate significant increases in Dixon's production capacity and strengthened market leadership.
2Joint venture details
As per the agreement signed in December 2024, Dixon will hold a 51% majority stake, while Vivo India will hold 49%. The approval, pending under Press Note 3 of 2020, was required for investments from countries sharing a land border with India. The joint venture will commence operations in September 2026.
3Analysts' views
Emkay raised Dixon's target price to Rs 15,200, maintaining a 'Buy' recommendation. The partnership with Vivo paves the way for large-scale production. Production estimates stand at 6.5 million units for FY27 and 18 million for FY28. Nomura predicts Dixon's market share could rise to 35-38%.
4Production estimates
Dixon currently accounts for 45-50% of India's smartphone production capacity. The partnership with Vivo will increase this share. Nomura estimates annual output could reach 60 million units if Dixon handles 70% of Vivo's production. FY28 production is expected to hit 55 million units.
5Market dynamics
Vivo leads the Indian market with a 23% share. It is expected to ship 35 million units in 2025. While overall sector sales fell by 2%, Vivo's sales are projected to grow by 15%. Dixon management is optimistic about the partnership boosting production volume.
6Importance for investors
Experts highlight Dixon's strong financial indicators and negative working capital cycle justify its high valuation. Policy support for domestic electronics production and incentives like the Mobile PLI 2.0 scheme are seen as growth accelerators.
Original article: Economic Times — Dixon Tech hisseleri Vivo ortaklığıyla yükseldi