Dixon goals to spice up exports, margin submit closure of PLI scheme, says MD Atul Lall, ETCFO
A ramp-up in export volumes and margin enlargement via the backward integration route will assist Dixon Applied sciences offset any potential fall in margins and volumes after the production-linked incentive (PLI) scheme ends in FY26, a high firm govt mentioned.
Dixon, which has constantly met incremental manufacturing targets below the scheme, mentioned incentives contribute round 0.6-0.7% to its cell phone income margins, with majority of the financial savings handed on to prospects. This was indicated in the course of the firm’s earnings name on Tuesday.
Dixon additionally doesn’t count on a slide in volumes post-PLI closure on account of its deeply entrenched relationships with prospects, a few of whom have inked strategic joint ventures with the corporate in the course of the tenure of the scheme.
Dixon shares closed 5.8% decrease at ₹15,598 on BSE Wednesday.
Dixon has guided manufacturing of 40-44 million smartphones within the present fiscal, which is able to ramp as much as 60-65 million by FY27. Of the estimated 40-44 million smartphone volumes in FY26, it expects export volumes will make up 10-12 million to North America, which is able to enhance considerably in FY27, Atul Lall, chief govt and managing director, Dixon Applied sciences, mentioned.
The corporate’s prospects in smartphone manufacturing embody high Android manufacturers in India, together with Motorola, Xiaomi, Oppo, Realme, Vivo, Transsion, and Nothing.
Whereas direct incentives will finish, Dixon believes the initiatives at present underway will generate advantages which might be way more than the PLI contribution, albeit doubtlessly with a while lag.
“We’re fairly assured of mitigating the affect, and it will likely be largely pushed by integration and in addition the efforts on effectivity and automation,” Lall mentioned.
The corporate is developing a brand new 1 million sq ft facility in Noida for smartphone manufacturing.
“We really feel that the initiatives that we’re taking over automation, rising our effectivity, and our foray into parts below the ECMS (electronics parts manufacturing scheme), the advantages and beneficial properties for us are going to be way more. There could be a while lag right here and there, however on an general foundation we’re sitting on a a lot more healthy and extra comfy place, submit PLI,” Lall mentioned.
