Dixon Technologies (India) Ltd.Margin Pressure Offset by Growth

Dixon Technologies reported Q1 FY27 revenues of ₹15,557 crores with EBITDA of ₹472 crores and PAT of ₹218 crores, excluding fair value gains.

The company demonstrated strong operational efficiency with ROCE at 34.1%, ROE at 23.4%, and a negative five-day working capital cycle. Management acknowledged temporary margin compression driven by Mobile PLI 1 scheme expiry in March 2026 and elevated memory prices, which pressured percentage margins as higher input costs were passed through to customers. Despite a 10-12% industry contraction, Dixon shipped 7.5 million smartphones while gaining market share.

IT hardware emerged as a standout, with Q1 revenues of ₹1,350 crores equaling the entire FY26 performance. Management projects 20-25% quarter-on-quarter smartphone volume growth in Q2 with a strong order book of 9-9.2 million units. The upcoming Mobile PLI 2.0 scheme is expected to unlock ₹18,000-20,000 crores in export revenues over two years. While margin pressure will persist through FY27, management expects recovery from FY28 onwards through component backward integration in displays and camera modules, alongside multiple facility launches planned for Q3-Q4 FY27.