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    Multibagger stock tumbles over 20% after disappointing Q3 results

    Synopsis

    "Revenue growth has been below expectation as consumer electronics, lighting and mobile phones key verticals for the company has seen steep decline. We however upgrade the stock to Neutral as the stock has already corrected sharply and strong growth momentum is expected to resume. We roll forward our valuation multiple

    Multibagger stock tumbles over 20% after disappointing Q3 resultsETMarkets.com
    Multibagger stock Dixon Technologies tumbled 20% to hit a 52-week low at Rs 2,676 in Friday's trade after the company reported disappointing results for the December 2022 quarter.

    Its revenue declined 22% year-on-year (YoY) to Rs 2,405 crore in Q3FY23. However, profit after tax (PAT) during the quarter grew 12% to Rs 52 crore, against Rs 46 crore in Q3FY22. Earnings before interest, taxes, depreciation, and amortization (Ebitda) margin, too, improved 130 basis points (bps) to 4.7% from 3.4%, in a year ago quarter. The management indicated that value engineering, cost optimization and certain price hikes were the main margin drivers.

    At 12.17 pm, Dixon Technologies was trading 19% lower at Rs 2,697, as compared to 1.4% decline in the BSE Sensex. The stock has also fallen nearly 32% in the last one month, while it has plunged about 40% in the last one year.

    Should you buy, sell or hold Dixon Technologies stock? Here's what analysts say:

    Yes Securities
    Yes Securities has a neutral recommendation on Dixon Technologies with a target price of Rs 3,506.

    "Revenue growth has been below expectation as consumer electronics, lighting and mobile phones key verticals for the company has seen steep decline. We however upgrade the stock to Neutral as the stock has already corrected sharply and strong growth momentum is expected to resume. We roll forward our valuation multiple and now value the company at 40x vs 50x earlier as there could be downside risk if the demand environment remains sluggish for an extended period," it said.

    ICICI Securities
    "At current valuations of (58x FY24E), we believe the risk-reward is not favourable to the investors and hence, we downgrade Dixon to Reduce with a revised DCF-based TP of Rs 3,000 (implied P/E of 36x FY25E EPS; earlier TP Rs4,120)," it said.

    Dixon Technologies is a company engaged in manufacturing products in consumer durables, lighting, home appliances, mobile phones and other electronic items in India.

    (Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of Economic Times)



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    (What's moving Sensex and Nifty Track latest market news, stock tips and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .)

    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

    Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

    ...more
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