In an unexpected turn, Dixon Technologies (India) Ltd's share price fell significantly despite reporting robust Q3 earnings. On January 21, 2025, the share price dropped by 12.99%, closing at ₹15,277.95 from a previous close of ₹17,559.45. This decline has surprised many investors, considering the company's impressive financial performance.
For the quarter ending December 2024, Dixon Technologies logged a consolidated net profit of ₹217 crore, marking a 124% year-over-year increase. The company's revenue soared by 117% to ₹10,461 crore, driven by strong performances in its mobile and electronics manufacturing services (EMS) segments. The notable earnings did not prevent the steep fall in share price.
The market's negative reaction stemmed from valuation concerns highlighted by brokerages like Jefferies and Goldman Sachs, leading to a drop in Dixon's market cap to ₹97,438 crore. Despite the strong financial results, the stock's high valuation seemed to be a point of worry for investors, contributing to the overall decline.
Looking ahead, Dixon Technologies remains optimistic about its growth prospects. The company plans to increase backward integration and expand its facilities, including establishing a display fabrication business under the India Semiconductor Mission 2.0 initiative. While some analysts maintain a 'buy' rating on the stock, others have downgraded it due to valuation concerns, leaving investor sentiment divided.