Dixon sees near-term margin pressure but bets on Vivo, IT hardware ramp
Near-term headwinds from PLI sunset and memory inflation will pressure margins, but backward integration and new verticals provide long-term growth runway.
What management said
- Smartphone volumes flat without Vivo; high double-digit QoQ growth expected in Q1.
- Vivo JV close to approval; could add 20 million units annually.
- IT hardware revenue targeted to triple to over ₹4,000 crore in FY27.
- Specialty EMS strategy launched with consulting firm; targets high-margin verticals.
The brief
Dixon Technologies' Q4 FY26 revenue was flat at ₹10,520 crore due to geopolitical concerns, softer demand and inventory rationalisation. Full-year revenue grew 26% to ₹48,893 crore, EBITDA (ex-exceptional) rose 23% to ₹1,887 crore and PAT (ex-exceptional) increased 20% to ₹845 crore. Smartphone volumes are expected to be flat in FY27 without the Vivo JV, but management sees a high double-digit volume growth sequentially in Q1 along with an ASP uplift of 12-15%. The Vivo JV is close to approval and could add 20-22 million units on an annualised basis. IT hardware revenue is seen tripling to over ₹4,000 crore. Telecom networking revenue is expected to rise from ₹5,000 crore to ₹7,500-8,000 crore. Lighting revenue is projected to double to ₹1,700 crore. Capex will be in a similar range as last year's ₹1,058 crore, funded by internal accruals. Management acknowledges margin pressure from the sunset of PLI schemes but expects absolute profit to improve as backward integration in camera modules and display kicks in from H2. Specialty EMS (aerospace, defence, auto, medical) is being built with a global consulting partner, aiming for ₹3,000-4,000 crore revenue at significantly higher margins. Sentiment is cautious near-term but constructive on the multi-year growth story.
In their words
“Margin profile will be slightly under pressure this year because the PLI has gone off and there is a lag in the margin accretion happening due to component foray.”— Atul Lall — Vice Chairman and Managing Director
“Without the Vivo also, the company will keep growing at almost 15 to 17%.”— Atul Lall — Vice Chairman and Managing Director
“We are targeting almost 56,000 crores without the Vivo numbers.”— Atul Lall — Vice Chairman and Managing Director
Summarised from the Dixon Technologies India Ltd Q4 2026 earnings-call transcript. View transcript.