Multibagger stock: Dixon Technologies triples investors money in 2020

Dixon Technologies (India) has become a multibagger stock after it almost tripled investors’ money in 2020. The shares of the company gained by nearly 151 per cent on a YTD basis.

The company’s net sales for Q1FY21 declined by 54.93 per cent YoY to Rs 516.94 crore while net profit fell by 93.21 per cent to Rs 1.60 crore for Q1FY21. In spite of this, the company’s stock surged during times of weak quarterly results and economic concerns caused due to the COVID-19 pandemic.

Analysts believe that the import restrictions on LED TVs and delays in approving licenses for imports to the top domestic brands have paved way for the growth of domestic players with Dixon Technologies benefitting as well. Additionally, the government’s production linked incentive (PLI) scheme is likely to be a boost for the company. Adding export markets as well as continued addition of MNC clientsare its key growth enablers.

According to the data on BSE, foreign portfolio investors (FPIs) raised their stake to around 14 lakh shares in Q1FY21 compared to 12.4 lakh shares held in Q4FY20. Thus, the FPI stake in the company stood at around 12.27 per cent at the end of Q1FY21 compared to 10.76 per cent in Q4FY20.

Dixon Technologies is engaged in manufacturing products in the consumer durables, lighting, and mobile phone markets in India. It also provides solutions in reverse logistics, which includes repair and refurbishment services of set-top boxes, mobile phones, and light-emitting diode (LED) television panels. Consumer electronics include LED television.

The stock of Dixon Technologies has jumped by nearly 230 per cent in a year and by almost 15 per cent since the beginning of September 2020. Currently, the stock is trading at Rs 9,497.95, up by 1.06 per cent or Rs 99.95 per share on BSE. On September 14, 2020, it touched its all-time high of Rs 10,280.70 per share on BSE.