Dixon Tech to make Google Pixel smartphone at Noida plant; share hits all-time high

Shares of Dixon Technologies (India) rallied over 6% to hit a new record high on Monday after its subsidiary, Padget Electronics, unveiled plans to start mass production of Google Pixel smartphones at its Noida plant. In February this year, Padget Electronics had entered into an agreement with Compal Smart Device India for manufacturing of mobile phones for its client, Google Information Services India. In recent quarters, Dixon has made significant client additions to its mobile business such as Jio and Nokia in (Mar’23), Itel (Jun’23), Xiaomi (Sept’23) and Realme (started production in May’24).

“We hereby inform you that Padget Electronics together with Compal to launch mass production of Google Pixel (Smart phones) for Compal’s designated customer ‘Google Information Services India Private Limited’,” Dixon said in an exchange filing on November 29.

Cheering the news, Dixon Technologies shares opened higher for the second consecutive session at ₹16,099.80, up 1.9% over Friday’s closing level of ₹15,805.10 on the BSE. In the first two hours of trade so far, the counter gained as much as 6.4% to hit a new all-time high of ₹16,819.45, with the market capitalisation crossing ₹1 lakh crore mark for the first.

The share price of Dixon Technologies has more than doubled in the past 12 months, rebounding from its 52-week low of ₹5,516.30 touched on December 1, 2023. In the calendar year 2024, the counter has jumped 158%, while it surged 68% in the past six months.

Despite the recent rally, analysts see more upside potential in the stock, citing strong opportunities in the mobile, Printed Circuit Boards for Air-Conditioners (PCBA), and IT hardware segments. Foreign brokerage Nomura has maintained its 'Buy' rating on the stock, with a target price of ₹18,654, implying an upside potential of 18% from Friday’s closing level.

"Dixon will have a significant share of business (SOB) of the Pixel in India, especially the relatively affordable A series, which contributed around 65 percent to Pixel's India sales in 2023. In our view, while volumes are low, realisations will be significantly better at ₹25,000 - ₹26,000 per unit for Dixon, compared to current average realisations of ₹9,000 per unit,” Nomura said in a latest report.

In a regulatory filing on Friday, Dixon said that its wholly owned subsidiary, Padget Electronics, together with Compal to launch mass production of Google Pixel smartphones for Compal’s designated customer ‘Google Information Services India Private Limited’. The production will commence at the Padget Electronics plant situated at Sector-68, Noida. The company has invested ₹256 crore to develop a 2.7 lakh sq. ft. manufacturing facility in Noida, with an annual production capacity of 25 million units. 

Over the years, Dixon has swiftly increased its presence in the mobile segment, catering to all the major brands in India such as Nokia, Samsung, Xiaomi, Motorola, Itel, and Oppo. It has also created a strong position in IT hardware with PLI benefits and has secured clients such as Acer and one more global customer.

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