Shares of Dixon Technologies extended their decline for the sixth consecutive session on Monday, dropping another 4% to Rs 11,821. This marks the stock’s lowest level since August 2024, with strong selling pressure persisting. At the close, the shares were down by 3.63% to Rs 11,880 on the National Stock Exchange (NSE).
The stock has been on a sharp downtrend since late September, witnessing a loss of around 35% from its peak value of Rs 18,471. Concerns over potential cuts in the company’s earnings per share estimates for FY27 have significantly impacted investor sentiment, leading to the ongoing decline. Despite brief signs of recovery, a pessimistic outlook from global brokerage firm Morgan Stanley has further dampened sentiment.
Dixon Technologies has emerged as one of the weakest performers among Nifty 500 stocks this year, with year-to-date losses of approximately 33.5%. Last week, Morgan Stanley reiterated its ‘Underweight’ rating on the stock and set a target price of Rs 11,563 per share. The brokerage highlighted uncertainties surrounding growth prospects post the extension of IT hardware import norms, potentially restricting opportunities for local manufacturers.
Morgan Stanley also noted that Dixon has maintained its cumulative IT hardware revenue guidance of Rs 48,000 crore until FY31 over the last two years, while the brokerage’s estimate stands at Rs 43,000 crore. Achieving the company’s guidance might pose challenges in the upcoming years, with IT hardware expected to contribute about 7% of Dixon’s revenue by FY30. The brokerage cautioned that favorable import policies could pose a downside risk to this estimate.
In terms of share price performance, Dixon Technologies is set to register its first annual decline in two years, with a drop of around 34% in 2025 so far. This marks a significant shift from the robust 173% surge witnessed in 2024. While the short-term outlook remains subdued, the stock’s long-term performance remains robust, with gains of approximately 204% over the past three years and around 340% over the last five years.
