Dixon Technologies, one of the mobile phone manufacturers who supplies to Reliance Jio's 4G phone business —Jio Bharat initiative, expects to generate a revenue ranging from Rs 1,600 to Rs 1,800 crore by March, 2024 from this order.

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Reliance Jio unveiled its Jio Bharat initiative — a mobile handset, an affordable feature phone aims to provide affordable access to the best-in-class Jio 4G network for customers still using 2G technology, for Rs 999, in July. The beta trial for first million Jio Bharat phones started on July 7. Reliance Jio has tied up with a few Indian electronic devise manufacturers, including Dixon Technologies, for manufacture and supply of the phones.

Initially, Dixon Technologies was given an order of about 15 million phones. However, Dixon management's projection reveals that the order has been further increased to 20 million units, to be delivered by March, 2024.

Also Read: Reliance Jio launches Jio Bharat phone at Rs 999 with new tariff plan

Saurabh Gupta, Chief Financial Officer of Dixon Technologies, said in an exclusive interview with CNBC-TV18, that the company expects a substantial revenue from the Jio Bharat manufacturing contract by March.

“Jio Bharat phone, which come out with an attractive pricing, met witnessed initial success. So clearly there is a big 2G market that they are ready to grab and we have got an order book of almost 2 crore mobile phones from Reliance Jio and it should get executed by March-April next calendar year. The quantum of the revenue will be around Rs 1,600-1,800 crore (from this order),” he said.

During the interview, Gupta also hinted at the company's involvement in what he described as 'a very preliminary discussion on Jio laptops.'

Consumer durables manufacturer Dixon Technologies is also close to signing another major order, as Gupta shared, that the company is in the final stages of signing a global client. He disclosed that this potential client ranks among the top three global players in the laptops and tablets industry. However, Gupta refused to divulge the name of this global giant.

Gupta emphasised the company's commitment to India's burgeoning electronics manufacturing ecosystem. Currently, India holds a modest 2 percent share in the electronic manufacturing services (EMS). But Gupta foresees this figure soaring to high single digits by 2030. This projection highlighted Dixon Technologies' role as a key player in India's journey towards self-reliance in electronics manufacturing.

Gupta also confirmed that Dixon Technologies is set to commence executing orders from Xiaomi starting in October.

Brokerage firm CLSA remains optimistic about Dixon Technology stock, expecting the company's revenue to grow at a compounded annual growth rate (CAGR) of 32 percent from 2023 to 2026, following a commendable 31 percent CAGR between 2017 and 2023.

In contrast, another brokerage, Kotak Institutional Equities, initiated coverage on Dixon Technologies with a sell rating and a price target of Rs 4,000. They suggest that the company's transition from slow-growing segments, where it enjoys a significant 30 percent-plus market share, into new EMS segments, exports, and component manufacturing, may pose certain challenges.

Dixon Technologies' shares are currently trading 0.5 percent higher at Rs 5,111.90, reflecting the mixed sentiment surrounding the company's future prospects.

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(Edited by : C H Unnikrishnan)

First Published:Sept 8, 2023 2:03 PM IST