Mehabe score: 6 G Factor: 5 Piotski Score: 4 The stock has a rating OBSERVE & HOLD. The mehabe team score is reflective of its fundamental and technical merits. A rating above 8 is considered good buy. The stock has a G-Factor of 5 and Piotski score of 4.
Description
Dixon Technologies (India) Limited is the largest* home grown design-focused and solutions company engaged in manufacturing products in the consumer durables, lighting and mobile phones/smart phones markets in India. Their diversified product portfolio includes (i) consumer electronics like LED TVs; (ii) home appliances like washing machines; (iii) lighting products like LED bulbs and tubelights, downlighters; (iv)mobile phones/smart phones; and (v) CCTV & DVRS (vi) Medical Equipment. Dixon also provides solutions in reverse logistics i.e. repair and refurbishment services of set top boxes, mobile phones /smart phones and LED TV panels.
Main Points
Brand behind the brands#
Dixon is the biggest manufacturer of LED TVs in India producing TVs for the brands like Samsung, Panasonic, Xiaomi, TCL, OnePlus and many more. They also manufacture lighting products for companies like Philips, Havells, Syska, Bajaj, Wipro, Orient and more. They happen to be the leading contract manufacturer of semi-automatic washing machines for clients like Godrej, Samsung, Lloyd, Panasonic and they are also in the business of manufacturing mobile phones and
security systems.Site:DIXONMain Symbol:DIXON
Stock trades at 4530.0, above its 50dma 4360.97. It also trades above its 200dma 3452.4. The stock remains bullish on techicals
The 52 week high is at 4735.00 and the 52week low is at 1402.20
Price Chart
P/E Chart
Sales and Margin
Strengths
– is expected to give good quarter
– has delivered good profit growth of 35.50% CAGR over last 5 years
Weakness
– Stock is trading at 35.99 times its book value
-Promoter holding has decreased over last 3 years: -3.90%
Competition
– The industry trades at a mean P/E of 96.1x. MIRC Electronics trades at the industry’s max P/E of 252.45x. DIXON trades at a P/E of 166.0x
– Industry’s mean G-Factor is 3.3 while the mean Piotski score is 8.0. DIXON has a G-Factor of 5 and Piotski scoreof 4.
– Average 1 month return for industry is 12.7%. The max 1- month return was given by Sharp India: a return of 42.16 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 2110.0 cr compared to Rs 857.0 cr for period ended Mar 2020, a rise of 146.2%
Operating Profits reported at Rs 80.0 cr for period ended Mar 2021 vis-vis 56.0 for period ended Mar 2020 .
Operating Margins contracted -274.3 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 7.56 compared to Rs 10.53 for previous quarter ended Dec 2020 and Rs 4.76 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 6448.0 cr for period ended Mar 2021 vis-vis sales of Rs 4400.0 cr for the period ended Mar 2020, a healthy growth of 31.8%. The 3 year sales cagr stood at 31.4%.
Operating margins shrank to 4.0% for period ended Mar 2021 vis-vis 5.0% for period ended Mar 2020, contraction of 100.0 bps.
Net Profit reported at Rs 160.0 cr for period ended Mar 2021 vis-vis sales of Rs 120.0 cr for the period ended Mar 2020, rising 25.0%.
Company recorded a healthy Net Profit CAGR of 37.9% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The company has had stable/constant Return on Equity (RoE) metric. The RoE on Last Year basis was 25.0% compared to 24.0% over the last 3 Years. – The stock has given a return of 207% on a 1 Year basis vis-vis a return of 100% over the last 3 Years. – The compounded sales growth on a TTM bassis is 47% vis-vis a compounded sales growth of 31% over the last 3 Years. – The compounded profit growth on a TTM basis is 32% vis-vis a compounded profit growth of 38% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Jun 2021 fii holding stood at 19.85% vis-vis 19.84% for Mar 2021 – Public shareholding has remained largely constant. The Jun 2021 public holding stood at 35.64% vis-vis 34.1% for Mar 2021
Conclusion
– is expected to give good quarter
– has delivered good profit growth of 35.50% CAGR over last 5 years – Stock is trading at 35.99 times its book value
-Promoter holding has decreased over last 3 years: -3.90%
Fundamentally, the stock remains weak on business fundamentals. Weak near term results have dampened and questioned business drivers. We suggest to wait for a upturn in business performance.
Technically, the stock trades above its 50 DMA 4360.97 and is trading at 4530.0 It has shown near term bullish momentum contrary to business fundamentals. We suggest to observe price action. However as investors, who like to avoid timing the markets, we suggest to avoid the stock
