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Dixon Technologies India to Invest Over Rs 1,500 Crore in Capacity Expansion

Updated: Jun 14, 2024 04:09:18pm

Dixon Technologies India to Invest Over Rs 1,500 Crore in Capacity Expansion

New Delhi, Jun 14 (KNN) Dixon Technologies India, a leading domestic electronics manufacturer, has announced plans to invest between Rs 1,500 crore and Rs 1,800 crore over the next three years to expand its production capacity and component manufacturing capabilities.

The investment strategy was disclosed by Atul B. Lall, Vice Chairman and Managing Director of the company.

The funds for this expansion will be generated primarily from internal accruals based on cash flow. For the current fiscal year alone, Dixon has earmarked an investment of over Rs 500 crore.

Lall stated that the company maintains a robust balance sheet with no debt and is open to raising additional funds if required for significant acquisitions.

In a strategic move, Dixon is exploring entry into the electric vehicle sector, focusing on the manufacture of electronic components.

Additionally, the company has expressed interest in non-consumer electronic manufacturing services and is currently scouting for land to establish a factory dedicated to producing electronic modules for electric vehicles.

Approximately one-third of the planned capital expenditure will be directed towards backward integration of components.

Lall emphasised that this integration is expected to enhance margins, improve capabilities, and strengthen relationships with existing customers.

For the current fiscal year, 60-65 per cent of the capital expenditure is slated for mobile phone capacity expansion, while Rs 180-200 crore will be invested in display modules, with the remaining funds allocated to other product lines.

Dixon recently entered into a term sheet with HKC Corporation to form a joint venture. This collaboration aims to manufacture components such as liquid crystal modules and TFT-LCD modules, as well as assemble end products including smartphones, televisions, monitors, and automotive displays.

The company reported strong financial results for the 2023-24 fiscal year, with consolidated revenue from operations increasing by 45 per cent year-on-year to Rs 17,713 crore. Net profit also saw a significant rise of 47 per cent year-on-year, reaching Rs 375 crore.

Lall projects that the company will sustain a revenue growth rate of 30-40 per cent over the next three years. However, he identified talent acquisition and development as the most significant challenge as Dixon expands into component and high-end manufacturing.

"We are evolving into an engineering powerhouse, venturing into multiple new domains such as robotics, automation, display modules, and precision engineering. Our ambition is to develop and manufacture globally pioneering products," Lall stated.

Dixon has established a substantial manufacturing footprint in India. It has the capacity to produce 45 million smartphones and 40 million feature phones annually, representing around 50 per cent of the market opportunity in this segment.

The company also boasts the largest television manufacturing capacity in the country and has developed production capabilities for nearly 10 per cent of India's refrigerator demand. Furthermore, Dixon is diversifying into the manufacture of laptops, tablets, and IT hardware products.

(KNN Bureau)


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