Dixon expects swift clearance for China JVs, to file new component applications next week

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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:

  1. Reduce import dependency by setting up local production of camera modules and display components
  2. Strengthen its EMS value chain by integrating high-value components
  3. Improve cost competitiveness for global brands using India as a manufacturing hub

JV Details and Component Focus

JV Partner (China)ProductExpected CapacityCommercial Production
TCL ComponentsLED TV panels2 million panels annuallyQ1 FY27
Lens TechnologySmartphone camera modules80 million units annuallyQ4 FY26
ATL BatteryLithium battery packs15 million units annuallyQ3 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 MetricFY25FY24YoY Change (%)
Revenue (₹ crore)19,32815,750+22.7
EBITDA (₹ crore)932768+21.3
EBITDA Margin (%)4.84.9-10 bps
Net Profit (₹ crore)501418+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:

  1. Increase localisation levels from current 30-40% to 50-60% over the next three years
  2. Improve margins by reducing import costs
  3. 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:

  1. Geopolitical tensions with China could delay approvals despite economic rationale
  2. BIS and MEITY compliance clearances could extend JV timelines
  3. 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

CompanyComponent JV StrategyLocalisation Focus
Dixon TechnologiesCamera modules, LED panels, battery packsAggressive, multi-component
Bharat FIHMobile PCBs, chargersMedium
Optiemus ElectronicsPCBs, wearables modulesMedium
Syrma SGSAutomotive electronics, PCBsMedium

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.

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