Dixon Technologies (India): Scaling potential

Dixon Technologies (India), the maker of smartphones for Samsung in India, hopes to witness strong revenue growth in the next financial year helped by outsourcing demand driven by the “Make in India” cause.

The company’s key competitive strength, scale and customer relationships will play a crucial role in attending the desired objective.

Dixon believes that the FY21 earning is likely to be driven by Top Load Washing Mach and ramp-up of revenues from Samsung’s TV and Mobile contracts.

It is also evaluating entering new product categories (such as Refrigerators, Wearables and Smart Speakers).

The company is excited about the draft Production Linked Incentive (PLI) policy, which aims to create domestic champions in Mobile manufacturing.

Meanwhile, the company has not seen a significant impact of Coronavirus on its operations, though TV and Washing Mach volume in Q4 are likely to be slightly lower than initial expectations.

In the financial year that comes to an end this month, the company is all set to double its total TV output to 2.2-2.3 million units, from 1.1 million TVs last year.

In other words, about 15% of all TVs sold in India will be assembled by Dixon.

The contract manufacturer started assembling TVs for Samsung on February 5, adding its first major customer after Xiaomi. It will manufacture models that are up to 65 inches in size for the new customer.

Currently, Dixon has a capacity of producing around 3.6 million TVs a year. By May this year, it expects to have increased that capacity to 4.8 million, boosted by the Samsung contract.

According to Dixon officials, the total number of TVs produced by the company next year (FY21) will be higher by around 35-40% compared to the current year.

In addition to Xiaomi and Samsung, the company also makes TVs for certain smaller brands in India.

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