Dixon Technologies Posts Strong Quarterly Results with 67% Profit Growth
Electronics manufacturing services provider Dixon Technologies has reported a robust financial performance for the December quarter, with consolidated net profit surging by an impressive 67% on a year-on-year basis. The company's profit climbed to Rs 287 crore, up significantly from Rs 172 crore recorded during the same period last year.
Revenue and EBITDA Show Steady Growth
While profit growth was substantial, revenue showed more modest expansion, increasing by 3% to reach Rs 10,803 crore. The company's EBITDA (earnings before interest, taxes, depreciation, and amortisation) demonstrated stronger momentum, growing by 37% year-on-year to Rs 546 crore.
The mobile and electronic manufacturing services divisions contributed substantially to these results, generating revenue of Rs 9,750 crore and delivering operating profit of Rs 350 crore for the quarter.
Industry Challenges from Memory Price Inflation
Despite these positive numbers, Dixon Technologies faces significant headwinds in the current market environment. Managing Director Atul Lall highlighted several challenges during the earnings call, noting that the electronics industry is grappling with commodity inflation and a sharp increase in memory prices, largely driven by surging artificial intelligence demand.
"The smartphone market in Q3 fell by 7% on a YoY basis," Lall explained. "This decline reflected post-festival slowdown, stressed by elevated inventory for brands, depreciating rupee, softening mass market affordability and moderation in demand as supply constraints and rising cost of memory chips remain."
Memory Transition and Supply Constraints
Lall provided detailed insight into how memory components have transformed from minor cost items to critical expense factors, particularly for budget devices. "Conventional DRAM prices have already risen sharply over the last two quarters, with further increases expected in mid-2026," he stated.
"For smartphones and PCs, memory has transitioned from being a relatively small line item to one of the most sensitive parts of the bill of materials, especially for lower price devices. The world's top suppliers are shifting their capacity towards AI applications, resulting in a supply squeeze."
Strategic Response and Expansion Plans
To navigate these challenging conditions, Dixon Technologies is implementing several strategic initiatives:
- Building scale across operations
- Improving operational efficiency
- Strengthening backward integration
- Diversifying the core electronics business
Lall emphasized that the company's returns provide sufficient headroom for investing in capacity expansion and component manufacturing capabilities. One notable expansion plan involves significantly increasing smartphone camera module production capacity from the current 40 million units to between 190 million and 200 million units.
This ambitious capacity enhancement reflects Dixon's confidence in its growth trajectory despite the near-term challenges posed by memory price volatility and demand moderation in key electronics segments.
