Shares of Dixon Technologies surged as much as 6.1% to hit a 52-week high of ₹6,764 apiece on the BSE in early trade on Tuesday, a day after the company’s subsidiary Padget Electronics Private Limited received a contract from Lenovo for manufacturing of laptops and notebooks under Production Linked Incentive (PLI 2.0) scheme.

The scrip opened higher at ₹6,456.55, up 1.32%, as against the previous closing price of ₹6,764. At 9:43 am, the share price of the company was trading 5.30% higher at ₹6,709. In comparison, the broader BSE Sensex which was trading 21.80 points or 0.03% higher at 69,950.33.

In the first hour of the trading session, the company’s market capitalisation stood at ₹40,007.91 crore with 16,816 shares exchanging hands as against the two-week average of 0.22 lakh shares. The company’s shares hit a 52-week low of ₹2,554.95 on January 30 this year.

In the past one month, three months, and one year, the counter has given returns of 26.86%, 32.57% and 67.66%, respectively. The counter has given 71.57% in returns in the year-to-date period.

According to the company, the contract is subject to the signing of a definitive agreement in due course.

"This will give a strong impetus to India’s manufacturing competitiveness. Lenovo will bring in the global know-how and processes to manufacture IT hardware products…. We are confident that this partnership will also scale up localization and creation of component ecosystem & employment opportunities in India," says Atul B Lall, vice chairman and MD, Dixon Technologies.

The development comes days after the company inaugurated its new manufacturing facility in Noida for the manufacturing of Xiaomi smartphones at an investment of ₹250 crore in the first phase and will employ 5,000 people. Span over 2.7 lac square feet, the manufacturing capacity by Padget Electronics has an annual production capacity of 25 million units per year.

The company expects revenues from the new unit to start coming in from the October-December quarter. In FY23, phones and electronic manufacturing services (EMS) accounted for 43% of revenue.

The company is amongst the 14 firms, which have received approval from the government for the local manufacturing of IT hardware products under the PLI 2.0 scheme.

In the July to September quarter of FY24, the company’s consolidated profit surged 47% to ₹113.36 crore as against ₹77.12 crore in the same period last year. The company’s revenue from operations stood at ₹4,943.18 crore, witnessing a growth of 27.83%, as against ₹3,866.77 crore in the same period last year.

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