India’s largest electronics manufacturing services (EMS) company, Dixon Technologies, is confident of receiving swift regulatory clearance for its proposed joint ventures with Chinese companies as it looks to strengthen its component localisation strategy and scale up production under the government’s PLI (Production Linked Incentive) scheme. The company also plans to file fresh applications next week for new components to enhance backward integration.
China JV Approvals: Strategic Importance
Dixon Technologies has announced joint ventures with leading Chinese component manufacturers to manufacture:
- Smartphone camera modules
- LED TV panels and open cells
- Lithium battery packs for consumer electronics
According to Dixon’s Managing Director, Atul Lall:
“We expect approvals for these China JVs to come swiftly given the strategic importance of domestic manufacturing and component localisation for India’s electronics growth story.”
Why JV Approvals Matter
India’s electronics manufacturing currently relies heavily on Chinese imports for critical components, with localisation levels still below 35% in several segments. Dixon’s JVs aim to:
- Reduce import dependency by setting up local production of camera modules and display components
- Strengthen its EMS value chain by integrating high-value components
- Improve cost competitiveness for global brands using India as a manufacturing hub
JV Details and Component Focus
JV Partner (China) | Product | Expected Capacity | Commercial Production |
---|---|---|---|
TCL Components | LED TV panels | 2 million panels annually | Q1 FY27 |
Lens Technology | Smartphone camera modules | 80 million units annually | Q4 FY26 |
ATL Battery | Lithium battery packs | 15 million units annually | Q3 FY26 |
Dixon will hold a majority stake in these joint ventures to ensure domestic value addition aligns with PLI eligibility criteria.
New Component Applications Next Week
In addition to existing JVs, Dixon plans to file fresh applications next week under the PLI scheme for new components, including:
- Smartphone PCBs (Printed Circuit Boards)
- LED lighting driver modules
- Small form factor lithium-ion battery cells
Atul Lall said:
“Our strategy is to backward integrate further to capture the maximum value within India and enhance our global competitiveness.”
Financial Performance Snapshot: FY25
Financial Metric | FY25 | FY24 | YoY Change (%) |
---|---|---|---|
Revenue (₹ crore) | 19,328 | 15,750 | +22.7 |
EBITDA (₹ crore) | 932 | 768 | +21.3 |
EBITDA Margin (%) | 4.8 | 4.9 | -10 bps |
Net Profit (₹ crore) | 501 | 418 | +19.8 |
The company continues to deliver strong double-digit revenue growth, driven by scale-up in mobile phones, LED TVs, wearables, and washing machine verticals.
PLI Scheme and Component Localisation
Dixon is among the largest beneficiaries under the smartphone and IT hardware PLI schemes. The proposed new component JVs and applications will enable it to:
- Increase localisation levels from current 30-40% to 50-60% over the next three years
- Improve margins by reducing import costs
- Attract global brands seeking India manufacturing with local component sourcing
Analyst Views
Analysts tracking the EMS sector noted:
“Dixon’s strategy to integrate high-value components like displays and camera modules is critical to its long-term competitiveness. Regulatory approvals for Chinese JVs will be key, given geopolitical sensitivities.”
Geopolitical and Regulatory Risks
While Dixon remains optimistic, sector experts flagged the following risks:
- Geopolitical tensions with China could delay approvals despite economic rationale
- BIS and MEITY compliance clearances could extend JV timelines
- Over-reliance on single country JVs may pose strategic risks, suggesting future diversification with Taiwanese and Korean partners
Stock Market Reaction
Dixon Technologies’ shares closed at ₹6,723 on NSE, up 1.2% following management commentary on swift JV clearance expectations and new component expansion plans. Investors welcomed the proactive localisation and backward integration approach.
Competitive Landscape
Company | Component JV Strategy | Localisation Focus |
---|---|---|
Dixon Technologies | Camera modules, LED panels, battery packs | Aggressive, multi-component |
Bharat FIH | Mobile PCBs, chargers | Medium |
Optiemus Electronics | PCBs, wearables modules | Medium |
Syrma SGS | Automotive electronics, PCBs | Medium |
Dixon leads the EMS sector with its multi-component and vertical integration strategy, supported by its scale and first-mover advantage in JVs with global component leaders.
Future Outlook
Dixon aims to:
- Reach ₹25,000 crore revenue by FY27
- Achieve 50-60% localisation across product categories
- Expand exports from current 6% to 15% of revenues by leveraging India as a global manufacturing hub
Atul Lall added:
“With JVs, fresh applications, and capacity expansions, Dixon is well placed to play a pivotal role in India’s electronics manufacturing growth and global supply chain diversification.”
Conclusion
Dixon Technologies’ expectation of swift regulatory clearance for its China JVs, coupled with its aggressive filing of new component applications next week, underscores its clear focus on component localisation and vertical integration. This strategic move will strengthen its position as India’s leading EMS company and accelerate its journey towards becoming a global electronics manufacturing powerhouse.
Disclaimer
This news content is for informational purposes only. It is not intended as investment advice. Readers are advised to consult financial experts before making any business or investment decisions based on this report.