India"s No.1 ODM player Dixon Technologies today reported a extraordinary 1,035 per cent rise in its consolidated net profit to Rs 18.2 crore for the quarter ended June, which was sharply lower than analysts estimate on account of disruptions caused due to second wave of COVID-19.
The contract manufacturer reported a 261 per cent year-on-year rise in consolidated revenues to Rs 1,867 crore for the reported quarter. The June quarter performance was aided by an extremely weak base in the year-ago period, which was marred by the national lockdown to contain the spread of Covid-19 infections.The company"s operating profit in the quarter soared 182 per cent on-year to Rs 48.3 crore, which also missed analysts" expectations.
Segment-wise Dixon"s consumer electronics segment reported a 262% rise in Q1FY22 as per the management demand scenario for LED TV"s remained resilient and highly efficient working capital management resulted in Negative capital employed in the business.
On Lighting products demand was impacted due to weak demand on account of lockdown. Revenues from lighting business rose 98% in Q1FY22. As per the management they have accumulated significant amount of semi conductors.
Revenues in Home Appliances segment grew 193% YoY in Q1FY22 as the company took good amount of price hikes but overall its margins contracted due to adverse operating leverage. As per the management margins will normalize in Q2 since the order book looks very healthy.
Mobile & EMS division's revenues rose 476% YoY in Q1FY22 vs Q1FY21 on account of new order wins from Motorola and Nokia but margins during the quarter contracted due to adverse operating leverage and initial ramp-up cost in its Mobile Business.
As per the Management the company is now planning to enter new categories like Laptops, PCs, Wearables etc to diversify itself from TVs and Home appliances space.
The lower-than-expected earnings of the company were likely a result of the impact of the second wave of Covid-19 infections in the country during the quarter and the localized lockdowns it triggered.