Dixon Technologies (India) Ltd has received long-awaited government approval for its joint venture with Hong Kong–based HKC Corp., a partnership first announced in June 2024. The joint venture will manufacture LCD and TFT-LCD display modules for smartphones, televisions, laptops, and automotive displays, removing a key regulatory hurdle that had delayed the project.
Beyond providing incremental growth, the venture marks an important step in Dixon’s effort to move up the electronics manufacturing value chain. The company operates as an electronics manufacturing services (EMS) assembler, a business that typically runs on thin margins due to low value added. Dixon’s Ebitda margin for the nine months ended December (9MFY26) was just 4%.
Through the venture, Dixon will be able to manufacture display modules locally in India. Display modules account for roughly 10-12% of the bill of materials in smartphones.
“This foray into display modules deepens Dixon’s presence in the component ecosystem, with the level of backward integration in smartphones expected to rise by about 10-12% from 16-17% now,” said Emkay Global Financial Services.
Dixon is expected to produce around 24 million smartphone displays and 2 million laptop displays annually in the first phase. It plans to invest ₹1,100–1,200 crore in the project. Trial production is expected to begin in June–July, with commercial production likely from September. The financial impact is expected to become more visible from FY28 onwards as the plant ramps up smartphone display capacity to about 55 million units.
Nomura estimates the display business alone could add about 50 basis points to Dixon’s overall margins by FY28. The brokerage expects revenue to grow to ₹91,021 crore by FY28 from ₹38,860 crore in FY25.
Dixon’s shares, however, have fallen 41% from their 52-week high of ₹18,471 reached on 25 September. Mobile volume prospects had been clouded by delays in approvals for the Vivo and HKC joint ventures, along with rising memory module prices that hurt demand for lower-end smartphones. Dixon’s Q3FY26 revenue grew 2% year-on-year, a sharp slowdown from the 53% growth recorded in H1FY26.
Valuations remain expensive. The stock trades at around 37x its FY28 estimated earnings, reflecting expectations of strong growth and successful execution of its backward integration strategy. While Dixon has a long-term opportunity, much of the optimism appears already priced in, leaving limited room for execution missteps.