Dixon Technologies India, a domestic electronics manufacturer, plans to invest Rs 1,500-1,800 crore over the next three years to enhance its production capacity and component manufacturing, according to Vice Chairman and Managing Director Atul B. Lall.
Dixon Technologies, the leading name in Indian contract manufacturing, plans to generate funds from internal accruals based on cash flow. This year, the company will invest over Rs 500 crore and remains open to raising funds for significant acquisitions, according to Lall. Additionally, Dixon is exploring the electric vehicle sector by manufacturing components such as electronic modules.
“Around one-third of the capex will be invested in backward integration of components. This fiscal itself, we will invest around Rs 570 crore. We will not be shy of making investments since our balance sheet is very strong with no debt. The total primary equity raised was Rs 60 crore that too during the IPO. The cash we generate is more than enough, but if required will also raise equity for any large ticket deals”, said Lall.
According to Lall, approximately 60-65% of this year's capital expenditure will be allocated to expanding mobile phone production capacity, Rs 180-200 crore will be dedicated to display modules, and the remainder will go towards other products. Dixon also aims to enter the non-consumer electronic manufacturing services sector and is seeking land to establish a factory for producing electronic modules for electric vehicles. Lall mentioned that this backward integration into components will boost margins, enhance capabilities, and strengthen relationships with existing customers.
Last week, Dixon signed a term sheet with HKC Corporation to establish a joint venture for manufacturing components such as liquid crystal modules, TFT-LCD modules, and for assembling end products like smartphones, TVs, monitors, and auto displays, along with selling HKC-branded end products in India. The company reported a 45% year-on-year increase in consolidated revenue from operations for 2023-24, reaching Rs 17,713 crore, while net profit rose by 47% year-on-year to Rs 375 crore. Lall stated that Dixon is positioned to sustain a revenue growth rate of 30-40% over the next three years.
Lall said the biggest challenge is building and shaping the company with the right talent now that it is expanding into component and hi-end manufacturing. “We are becoming an engineering powerhouse with multiple new areas like robotics, automation, display modules and précising engineering. We want to develop and manufacture global first products”, he said.
Dixon has established a capacity to produce 45 million smartphones and 40 million feature phones, capturing about 50% of the market opportunity in this sector. The company also holds the largest television manufacturing capacity in India and has developed the capacity to meet nearly 10% of the country’s demand for refrigerators. Additionally, Dixon is expanding into the manufacturing of laptops, tablets, and IT hardware products.