Dixon Technologies shares may correct another 5-10%, says Chola's Dharmesh Kant

What happened

Dharmesh Kant of Chola Securities said Dixon Technologies shares could fall another 5% to 10%, citing margin pressure, negative operating cash flows and limited upside at the current valuation. He said pressure may last for the next couple of quarters, while Vivo-related business benefits may become clearer only in FY28.

Confirmed

Global impact / market context

If margins remain under pressure, Dixon could earn less profit from mobile manufacturing and other electronics businesses, while negative operating cash flow means its operations used more cash than they generated during the quarter. Uncertain timing for an expected government payment could add to cash-flow concerns.

Analyst inference

Kant’s warning links operating concerns to valuation: he sees limited room for share-price gains and says the price-to-earnings multiple, which compares a share price with company earnings, could fall from 42–48 times to around 35–40 times. He also says Vivo benefits may take until FY28 to show.

Confirmed

What to watch

1. Watch whether Dixon’s margins weaken over the next couple of quarters, as Kant expects, and whether pressure appears in mobile manufacturing, washing machines, refrigeration or component businesses. Analyst inference
2. Track the timing of the expected government payment of around ₹1,000 crore; the article says when Dixon will actually receive it remains uncertain. Confirmed
3. Look for evidence that Vivo-related business benefits become more visible by FY28, as well as signs that mobile manufacturing growth can be sustained. Analyst inference

Evidence

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