Dixon Technologies : Incentive benefit
Shares of Dixon Technologies (India), although pared early gains but continues to trade in the positive territory following its arm, Padget Electronics, was approved as a mobile manufacturing partner under the government’s Production Linked Incentive (PLI) scheme for Large Scale Electronics Manufacturing.
Under the scheme, the company will get an incentive of 4% to 6% on incremental sales (over base year) of goods manufactured in the country.
Under Mobile Phone (Domestic Companies) Segment, Indian companies including Lava, Bhagwati (Micromax), Padget Electronics, UTL Neolyncs and Optiemus Electronics are approved by MeitY. These companies are expected to expand their manufacturing operations in a significant manner and grow into national champion companies in mobile phone production.
PLI scheme has been huge success in terms of the applications received from Global as well as Domestic Mobile Phone manufacturing companies and electronic components manufacturers.
Over the next five years, the companies approved under the PLI scheme are expected to lead to total production of more than Rs 10.5 lakh crore. Out of the total production, the approved companies under the mobile phone segment have proposed a production of over Rs 9 lakh crore.
The approved companies have proposed a production of about Rs 1.25 lakh crore and those under the specified electronic components segment have proposed a production of over Rs 15,000 crore.
Dixon Technologies is expected to see strong revenue growth in the next financial year helped by outsourcing demand driven by the “Make in India” cause. The company’s key competitive strength, scale and customer relationships will play a crucial role in attending the desired objective.
It believes the FY21 earnings to be driven by Top Load Washing Mach and ramp-up of revenues from Samsung’s TV and Mobile contracts.It is also evaluating entering new product categories (such as Refrigerators, Wearables and Smart Speakers).
The company is excited about the draft Production Linked Incentive (PLI) policy, which aims to create domestic champions in Mobile manufacturing.
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