IPO Note- Dixon Technologies (India) Ltd
“Dixon Technologies (India) Ltd (DTIL) is the largest home grown design-focused and solutions company engaged in manufacturing products in the consumer durables, lighting and mobile phone segments in India. The company manufactures electronics products for Panasonic, Philips Lighting India, Haier Appliances, Gionee, Surya Roshni, Reliance Retail, Intex Technologies, Mitashi.
Outlook & Valuation: DTIL would continue to report higher revenue and improvement in margins owing to its presence in high growth segments, experienced management and growing share of ODM segment. Despite the company operating on thin margins, it has registered return on capital of a whopping 33.3% in FY2017. Further, it has been generating positive cash flow from operations over the last 5 years and negligible debt post IPO. At the upper end of the price band, the pre issue P/E multiples works out be 38.5x of FY2017 EPS, on P/B, it is valued at 9.8x of FY2017 book value. We recommend ‘SUBSCRIBE’ on the issue for a mid-to-long term period.”