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Dixon Technologies to invest Rs 1,500-1,800 cr in India over the next three years

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In Short:

Dixon Technologies India plans to invest Rs 1500-1800 crore in the next 3 years to expand production capacity and component manufacturing. The company will use internal funds for investments and may raise equity if needed. Dixon will focus on expanding mobile phone capacity, display modules, and venturing into electric vehicle components. The company reported a 45% increase in revenue and aims for 30-40% growth in the next 3 years.

Dixon Technologies India Plans Rs 1500-1800 Crore Investment for Expansion

Home grown electronics manufacturer Dixon Technologies India has announced a significant investment of Rs 1500-1800 crore over the next three years. This investment will be used to expand production capacity and component manufacturing, according to vice chairman and managing director Atul B. Lall.

Investment Details

The company plans to generate the funds from internal accruals based on cash flow. This year alone, Dixon will invest over Rs 500 crore and is open to raising funds for big ticket acquisitions. Additionally, Dixon is looking to enter the electric vehicle space by manufacturing components like electronics modules.

Atul B. Lall mentioned that around one-third of the capital expenditure will be invested in backward integration of components. This fiscal year, Dixon will invest approximately Rs 570 crore. He emphasized that the company’s balance sheet is strong with no debt and they are willing to raise equity if required for large deals.

Focus Areas

Lall revealed that 60-65% of the capital expenditure this year will go towards mobile phone capacity expansion, Rs 180-200 crore on display modules, and the remaining balance on other products. Dixon is also exploring opportunities in non-consumer electronic manufacturing services and is scouting for land to set up a factory for electronic modules used in electric vehicles.

This backward integration into components is expected to enhance margins, capabilities, and strengthen relationships with existing customers.

Strategic Partnerships

Dixon recently signed a term sheet with HKC Corporation to establish a joint venture for manufacturing components such as liquid crystal modules, TFT-LCD modules, assembly of end products like smartphones, TVs, monitors, and auto displays. The joint venture will also sell HKC branded products in India.

Financial Performance and Future Growth

In the last financial year, Dixon reported a 45% year-on-year increase in consolidated revenue reaching Rs 17,713 crore, while net profit rose by 47% to Rs 375 crore. Lall expressed confidence in sustaining revenue growth by 30-40% over the next three years.

Future Vision

Lall highlighted the challenge of attracting the right talent as Dixon expands into component and high-end manufacturing. The company aims to become an engineering powerhouse by focusing on areas like robotics, automation, display modules, and precision engineering to develop and manufacture cutting-edge products.

Currently, Dixon has significant manufacturing capacities in smartphones, feature phones, televisions, and refrigerators. The company is also venturing into laptop, tablets, and IT hardware manufacturing.

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