Dixon Applied sciences Q3 revenue hit by smartphone slowdown as cellular revenues slide
Dixon reported Rs 9,750 crore revenues from its cellular and different EMS division producing an working revenue of Rs 350 crore. The hunch in revenues got here because of a 7% on-year fall in smartphone shipments within the post-festive quarter pushed by excessive stock, and rising reminiscence prices.
The corporate’s general topline at Rs 10,671 crore grew 2.1% on-year dragged by weaker than anticipated cell phone manufacturing through the quarter. Web revenue for the quarter grew 67% on-year to Rs 287 crore, largely aided by a one-time achieve of Rs 131 crore through the quarter ensuing from honest worth achieve on Dixon’s stake sale in Aditya Infotech Restricted for its lighting enterprise endeavor.
“Typical DRAM contract costs have risen sharply over the past two quarters with additional will increase anticipated in mid-2026. For smartphones and PCs, reminiscence has moved from being a comparatively small line merchandise to one of the crucial delicate elements of the invoice of supplies, particularly for lower-priced gadgets,” mentioned Atul Lall, vice chairman and managing director, Dixon Applied sciences at an earnings name Thursday.
Dixon’s smartphone manufacturing volumes for the December quarter fell to round 6.9 million items, from round 8 million within the earlier quarter which coincided with the festive season. The March quarter, Lall mentioned, is anticipated to see manufacturing of 7-7.5 million items, however visibility into the following fiscal stays fluid because of the reminiscence worth will increase, holding conservative estimates at 60-65 million items.
Lall, nonetheless, mentioned for Dixon the associated fee will increase in parts are a pass-through holding unit economics protected. Nevertheless, the sharp enhance in end-user costs is impacting demand within the mid and low-end worth segments.
“Past worth, there are additionally points relating to the bodily availability of reminiscence chips, which creates uncertainty for manufacturers in planning their volumes,” Lall mentioned, including that regardless of the short-term exterior headwinds, the long-term steerage of reaching Rs 1 lakh crore income stays aggressive and intact.Market trackers are additionally factoring within the closure of the federal government’s production-linked incentive scheme, which has helped Dixon to shore up its margins and appeal to extra clients spanning the Android cellphone ecosystem.
Dixon’s share has been falling constantly over the previous few months. Shares closed 0.56% up at Rs 10,338.75. The outcomes have been introduced after market hours.
Cellular margins are at present 3.5% together with PLI. If the PLI is just not prolonged, about 0.5% of the margin will likely be impacted. Nevertheless, we’re assured that our backward integration play will play out in FY27-28 which won’t solely offset the PLI loss however increase margins additional,” mentioned Saurabh Gupta, group CFO, Dixon Applied sciences.
Relating to an extension, Dixon’s administration mentioned there are deep discussions occurring between the trade and the federal government and whereas there was a constructive response, an extension is just not an absolute certainty.
“Lots of information has been shared. The federal government is evaluating. One view is after all they need to give extra assist to the sector until the time that element ecosystem will get created,” Lall mentioned.
