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Investing.com - UBS has upgraded Dixon Technologies India Ltd (NS:DIXON) to Buy from Neutral, while significantly raising its price target to INR23,000.00 from INR13,000.00.
The upgrade comes as UBS analyst Akshay Gattani assumes coverage of the Indian electronics manufacturing services company, citing strong growth potential through backward integration into non-semiconductor smartphone components including displays, camera modules, enclosures and batteries.
UBS expects this integration to drive a 110 basis point improvement in EBITDA margin by fiscal year 2028, compared to the consensus expectation of only 40 basis points, despite the phase-out of mobile Production Linked Incentive by fiscal year 2026.
The investment bank projects Dixon’s revenue to reach US$11 billion by fiscal year 2028, representing 2.5 times growth from fiscal year 2025 levels, with additional growth opportunities beyond 2028 through component expansion beyond captive use, exports, new verticals like networking and servers, and potential inorganic growth.
UBS believes Dixon’s scaling strategy will maintain strong returns as margin improvements should offset lower asset turnover, supporting the significantly higher price target that represents substantial upside from current levels.
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