Dixon Technology (India) Ltd - Q4 FY20 Results
CMP: 5,410
Total income from operations 857 Cr
859 Cr (-0.02%) YoY | 994 Cr (-13.72%) QoQ
Year ending revenue: 4,400 Cr Vs. 2,984 Cr (47.41%)
Net Profit of 27.5 Cr
16.5 Cr (66.67%) YoY 26.3 Cr (4.53%) QoQ
Year ending Net profit: 120.5 Cr Vs. 63.3 Cr (90.31%)
EPS (in Rs.) 23.51
14.38 YoY | 22.33 QoQ
Year ending EPS: 102.7 Vs. 55.14
View: Result is overall good and above expectation. YoY revenue flat but profit increased in YoY and QoQ.
Business Updates & Highlights:
Q4FY20 EBITDA is around INR 55.9 Cr Vs. 39.3 Cr in Q4FY19 therefore up by 42.2% in YoY. EBITDA margin is 6.5% Vs. 4.6% in Q4FY19 therefore up by 190 bps.
FY20 EBITDA to Rs. 228.2 Vs. 140.5 Cr in FY19 therefore up by 62% in YoY. EBITDA margin of 5.2% Vs. 4.7% in FY19.
Finance cost in Q4F7.6 Cr Vs. 8.8 Cr in Q4FY19 therefore declined by 13.6% in YoY.
Key business updates
Company is primarily into five operating segment viz. Consumer electronics – 45.7%, Lighting products – 30%, Home Appliances – 10.5%, Mobile Phones – 7%, Security systems – 6%.
Q4FY20 YoY topline growth for consumer electronics – 22%, Lighting products – (16%), Home Appliances – (3%), Mobile Phones – (10%), Security system – (20%).
Q4FY20 YoY bottom line growth for consumer electronic – 138%, Lighting product – 18%, Home appliances – 4%, Mobile phones – 416%, Security system – 20%. Despite negative topline growth for some of the business segment the company maintain good line of operating profit.
Financial
ROE and ROCE is around 26% and 33% respectively and book value per share is around INR 385 and share is currently trading at 13x of its book value. Company is currently trading at annualized PE of around 49.5 which is expensive as per Industry benchmark. Promoter holding is around 36.1% in the company which is low and slightly decreased in QoQ. FIIs and mutual fund hold around 10.8% and 22.1% in the company. Cash and cash equivalent from operating activities as of March 2020 is around INR 237 Cr Vs. 143 Cr as of March 2019. Debt as of March 20 is around INR 86 Cr Vs. 141 Cr in March 2019 (**Very positive**). A/c receivable is around 43 days which is also good and fair.
Position: Share strong support price is INR 4,850. Long term investor can continue with the company with target price of INR 5700. Short term share will also perform despite in ASM.
Share View: Share price high 5,572 (52 week) and now 4,976. Dixon Technologies provides design focused solutions in consumer durables, home appliances, lighting, mobile phones and security devices to customers across the globe, along with repairing and refurbishment services of a wide range of products including set top boxes, mobile phones and LED TV panels.
Opportunities: Company has diversified business model according to current and future market. The share has achieved at all time high despite market corrected heavily. As per the current report Dixon is also going to make Covid – 19 Testing machine also. Dixon became leader of Indian EMS industry by: i) entering multiple segments, ii) backward integration, iii) focus on ODM solution. As per the current innovative technology Dixon can be good performer in longer run. Despite YoY top line decreased in some segment but bottom line improved and significantly well performed.
Risk: Due to Covid – 19 outbreak the company topline impacted in the Q4 and it can be also be impacted in Q1 and Q2 FY21 as well. Since spending currently through essential products and goods.
Sources:
Various publications
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