Dixon Technologies India. has unveiled an ambitious plan to invest Rs 1,500-1,800 crore over the next three years. The investment aims to enhance production capacity and component manufacturing, according to Vice Chairman and Managing Director Atul B. Lall. This strategic move underscores Dixon’s commitment to strengthening its market position and expanding its technological capabilities.
Dixon Technologies, renowned as India’s top contract manufacturing company, plans to finance this substantial investment through internal accruals, leveraging its robust cash flow. “This year, we will invest over Rs 500 crore and remain open to raising funds for significant acquisitions,” Lall stated. The company is also exploring opportunities in the electric vehicle sector, focusing on manufacturing components such as electronic modules.
“Around one-third of the capex will be invested in the backward integration of components. This fiscal alone, we will invest around Rs 570 crore,” Lall elaborated. He emphasized that Dixon’s strong balance sheet, free of debt, allows for confident investment. “The total primary equity raised was Rs 60 crore during the IPO. The cash we generate is more than enough, but if required, we will also raise equity for any large-ticket deals,” he added.
Lall outlined that approximately 60-65% of this year’s capital expenditure will be allocated to expanding mobile phone production capacity. An additional Rs 180-200 crore will be dedicated to display modules, with the remainder directed towards other products. Dixon also aims to enter the non-consumer electronic manufacturing services sector and is actively seeking land to establish a factory for producing electronic modules for electric vehicles. Lall noted that this backward integration into components will boost margins, enhance capabilities, and strengthen relationships with existing customers.
Last week, Dixon signed a term sheet with HKC Corporation to establish a joint venture for manufacturing components such as liquid crystal modules and TFT-LCD modules. This partnership will also involve assembling end products like smartphones, TVs, monitors, and auto displays, and selling HKC-branded products in India. Dixon reported a 45% year-on-year increase in consolidated revenue from operations for 2023-24, reaching Rs 17,713 crore, while net profit rose by 47% to Rs 375 crore. Lall affirmed that Dixon is well-positioned to sustain a revenue growth rate of 30-40% over the next three years.
Lall highlighted that the biggest challenge is building and shaping the company with the right talent as it expands into component and high-end manufacturing. “We are becoming an engineering powerhouse with multiple new areas like robotics, automation, display modules, and precision engineering. We want to develop and manufacture global first products,” he said.
Dixon has established the capacity to produce 45 million smartphones and 40 million feature phones, capturing about 50% of the market opportunity in this sector. The company also holds the largest television manufacturing capacity in India and has developed the capacity to meet nearly 10% of the country’s demand for refrigerators. Additionally, Dixon is expanding into the manufacturing of laptops, tablets, and IT hardware products.
This significant investment plan not only reflects Dixon’s growth ambitions but also its dedication to advancing India’s electronics manufacturing landscape, positioning the company as a key player in the global market.
