How should investors trade Dixon Technologies after strong Q1FY26 results

Dixon Technologies Ltd, a leading player in the Indian electronics manufacturing services (EMS) industry, delivered a strong financial performance in Q1FY26 with consolidated revenue soaring 95 per cent year-on-year (YoY) and profit after tax (PAT) doubling compared to the same period last year. The company’s earnings before interest, taxes, depreciation, and amortization (EBITDA) increased by 89 per cent, while EBITDA margin remained stable at 3.8 per cent versus 3.9 per cent in Q1FY25.

Dixon Technologies Q1FY26 Financial Highlights (YoY)

Revenue: Up 95 per cent

EBITDA: Up 89 per cent

EBITDA Margin: 3.8 per cent compared to 3.9 per cent last year

Brokerage Analyst Ratings and Price Targets on Dixon Stock

JP Morgan has maintained an Overweight rating on Dixon Technologies with an increased target price of Rs 19,500, up from Rs 17,700. JP Morgan praised Dixon’s strong mobile business momentum and highlighted the company’s upcoming filing for the electronic component manufacturing scheme. The brokerage also noted the company’s efforts to scale its non-mobile business, signalling future growth potential.

In contrast, Goldman Sachs reiterated a Sell rating, despite raising the target price marginally to Rs 11,110 from Rs 11,030. Goldman Sachs expressed concerns over valuation and projected moderation in growth. The firm remains cautious about the company’s ability to retain EMS customers despite value addition.

CLSA upheld a Buy rating, increasing its target price to Rs 19,365 from Rs 19,000. Similarly, Nomura continued with a Buy stance but cut its target price slightly to Rs 21,154 from Rs 21,409. Nomura anticipates margin expansion driven by scale benefits from joint ventures and expects EBITDA margins to improve from 3.9 per cent in FY26 to between 4.4 and 4.7 per cent by FY27-28.

Meanwhile, Morgan Stanley maintained an Underweight rating with a target price of Rs 11,563, citing revenue misses across key segments such as mobile EMS, consumer electronics, and lighting.

What This Means for Investors

Dixon Technologies’ strong Q1FY26 results underscore the company’s robust growth trajectory in India’s EMS sector, especially its mobile manufacturing vertical. The company’s strategic focus on expanding its non-mobile electronics business and leveraging government incentives could further boost revenues and margins.

Investors should weigh the optimistic views of JP Morgan, CLSA, and Nomura against the more cautious outlooks of Goldman Sachs and Morgan Stanley, balancing growth potential with valuation risks.