Dixon misses Q1 profit estimates as margin pressure offsets revenue growth

Published 31 July 2026 · local

New Delhi: Dixon Technologies Ltd, India's largest listed electronics manufacturer, reported lower-than-expected profit for the April-June quarter as supply-chain disruptions, higher raw material costs and the expiry of a key government incentive scheme squeezed margins despite robust revenue growth. Excluding the exceptional gain from the sale of its stake in Aditya Infotech, the Noida-based company’s net profit fell 2% year-on-year (y-o-y) to ₹218 crore, missing analysts’ expectations — a Bloomberg poll of 22 analysts had projected expected net profit of ₹228.3 crore. A 23% rise in cost of materials to ₹15,064 crore further hit profitability. The cost pressures also affected Dixon’s operating margin, which in the June quarter took an 80 basis points (bps) hit to drop to 3% for the period. Revenue, however, rose 21% to ₹15,548 crore, beating the Bloomberg analysts’ poll estimate of ₹14,340 crore on the back of higher-value mobile phone production. Atul Lall, who was reappointed Dixon’s managing director for five years on Friday, said in a post-earnings analyst call that the company’s numbers were driven by increased production of its largest mobile phone customers.

However, significantly higher cost of operations and capital expenditure in inventory hit its profit. “The overall smartphone market demand remains weak. To put the quarter in simple terms, Dixon gained market share in smartphones by retaining consistent volume of mobile phone production, while the volumes of other competitors declined. At the same time, the industry has moved away from volume growth to value growth, which is why even at flat volumes, our revenue grew,” Lall said. The company’s performance appeared bleak in contrast with its fellow electronics maker Syrma SGS, which on Wednesday reported 67% y-o-y rise in revenue to ₹1,588.6 crore, while net profit more than doubled to ₹105.7 crore in Q1FY27. However, notably, Syrma SGS does not operate in mobile phones, where the slowdown in demand and cost impact have been the highest. Also Read | Dixon pins FY27 growth hopes on Vivo JV approval, steady mobile demand Analysts said Dixon’s heavy exposure to mobile phones made it susceptible to impact from the slowdown, since the hit from the ongoing electronics supply chain crisis is the heaviest on mobile devices.

“We don’t expect any margin improvement for Dixon in the current fiscal, but all factors taken together could improve operating margin from next year onward,” said Harshit Kapadia, vice-president at Elara Capital. “Until then, most changes would be slight quarterly tweaks, as the current quarter margins were impacted by some foreign exchange impact as well.” Kapadia added that Dixon’s investments in local component manufacturing initiatives may take some time to boost its margins. Lall concurred. “Our display module operation has not yet begun, while the camera module operation under Q Tech India generated ₹500 crore last year, and is yet to be mature. At the same time, exports contributed to ₹1,100 crore (about 7%) of our top line this quarter—within two years. As our anchor clients ramp up business with us, we’ll see exports generate up to ₹20,000 crore annually by then.” In comparison, Syrma SGS reported 25% of its revenue from exports, which grew 67% to ₹381 crore in Q1FY27. In an interview with Mint following the company’s results, Saurabh Gupta, Dixon’s whole-time director and group chief financial officer, said there were three reasons why the company took a hit to its profitability for the quarter.