Dixon Technologies (DIXON) Q2 24/25 earnings summary

Executive summary

• Consolidated Q2 FY25 revenue reached ₹11,528 crore, up 133% year-over-year, with EBITDA at ₹420 crore (up 110%) and PAT at ₹412 crore (up 265%), driven by strong segment performance and a significant fair value gain from a joint venture sale.

• H1 FY25 revenue was ₹18,116 crore, up 120% year-over-year, with EBITDA at ₹676 crore (up 102%) and PAT at ₹551 crore (up 204%), reflecting robust growth momentum.

• Adjusted PAT for Q2 FY25, excluding a fair value gain of ₹210 crore, was ₹236 crore, up 109% year-over-year.

• Strong capital allocation and working capital management led to ROC of 38.9% and adjusted ROE of 31% as of September 2024.

• Gross debt-to-equity ratio stood at 0.16, and cash conversion cycle was -3 days, indicating improved efficiency.

Financial highlights

• Mobile phones and EMS revenue was ₹9,444 crore in Q2 FY25, up 235% year-over-year, contributing 82% of total revenue and 73% of operating profit.

• Consumer electronics revenue was ₹1,413 crore, with operating profit of ₹49 crore and margin of 3.7%.

• Home appliances revenue was ₹444 crore, up 22% year-over-year, with operating profit of ₹49 crore (up 46%).

• Lighting revenue was ₹233 crore, with operating profit of ₹17 crore, both growing quarter-on-quarter.

• Cost of material consumed increased to 92.4% of revenue in Q2, up 2.0 percentage points year-over-year, impacting gross margins.

Outlook and guidance

• Confident of sustaining strong revenue growth due to robust demand, new customer additions, and ongoing expansion of high-margin segments.

• IT hardware business expected to stabilize at ₹4,500-5,000 crore annual revenue by year three.

• iSmartU revenue projected at ₹7,000-7,500 crore for the current year and ₹9,000-10,000 crore for next year.

• Telecom and networking segment targeting ₹2,400 crore this year and ₹6,000-7,000 crore next year.

• Margin expansion expected in 15-18 months as backward integration matures.