Dixon Tech shares rise 4% as CLSA, Nomura turn bullish on new acquisition and JV

Shares of Dixon Technologies rallied as much as 4 percent to Rs 16,450 in morning trade on July 16 after it signed a binding term sheet to acquire a majority 51 percent stake in Kunshan Q Tech Microelectronics (India) Pvt. Ltd. The move, part of a mix of primary and secondary investments, will give Dixon access to advanced technology and precision manufacturing in camera and fingerprint modules — key components used in smartphones, IoT devices, and automobiles.

Q Tech India is backed by Q Technology (Singapore) and Kunshan Q Technology International, both entities within the larger Q Tech Group. Dixon expects the acquisition to deepen its expertise in high-value components and contribute to India’s growing electronics supply chain.

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In a separate development, the company also announced plans to form a joint venture with Chongqing Yuhai Precision Manufacturing Co. Ltd., with Dixon set to hold a dominant 74 percent stake. The JV will focus on manufacturing precision parts for laptops, mobile devices, connected devices, and automotive applications. The partnership is expected to sharpen Dixon’s competitive edge in high-precision engineering and broaden its footprint across diverse product categories.

Following the development, Nomura has maintained a Buy rating on Dixon Technologies with a target price of Rs 21,409 per share. This implies an upside potential of 35 percent from the last close. The brokerage sees the company’s entry into the camera module business through its stake in Q Tech India as a key value addition. It believes Dixon’s move to expand into both camera modules and precision components could lead to a 5 percent upside in earnings per share (EPS). The separate 74:26 joint venture with Chongqing Yuhai marks the company’s formal entry into precision components manufacturing.

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CLSA has reiterated its High Conviction Outperform call on Dixon, with a target price of Rs 19,000 per share. It notes that the company is taking significant steps to increase value addition in smartphones, especially through camera modules and precision enclosures. When combined with its existing JV with HKC, Dixon’s value addition in smartphones could rise from 15–17 percent to as much as 45–55 percent. CLSA also expects this to improve margins by 150–200 basis points and open up new external revenue opportunities.

Dixon Technologies’ share price is down 12 percent since the beginning of the year.

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