Dixon Tech shares surge 7% on Rs 1.9 lakh crore phone manufacturing push. Buy, sell or hold the stock?

Published 16 July 2026 · finance

Shares of Dixon Technologies rallied as much as 7% to their day’s high of Rs 14,680 on the BSE on Thursday after the Union Cabinet

Shares of Dixon Technologies rallied as much as 7% to their day’s high of Rs 14,680 on the BSE on Thursday after the Union Cabinet approved the Rs 1.27 lakh crore second phase of the India Semiconductor Mission (ISM) and a new Rs 62,500 crore Mobile Phone Manufacturing Scheme (MPMS). The government will release the administrative notification for both schemes within the next fortnight, electronics and information technology minister Ashwini Vaishnaw said. "The government's conditionalities for incentives are aligned with the industry's perspective which focuses on building scale, making India globally competitive, and owning intellectual property," said Atul Lall, managing director at Dixon Technologies, a key beneficiary of the earlier PLI scheme.The scheme for mobile phones—billed as different from the production-linked programme that lapsed on March 31—will have a tenure of five years and disburse incentives based on domestic sourcing as well as design and R&D by Indian brands. The scheme will also offer incentives for export of smartphones.Decoding MPMSThe scheme outlines incentives for eligible sales in the range of 2.25% to 5%. There is an additional incentive of 1.5% for domestic sourcing of key components and another 3% for building an Indian brand with its own design and R&D.The government expects MPMS to help increase domestic value addition in smartphones to 40-45% by the end of the scheme from 24% now.Also read: Vivo-Dixon deal approval reveals India's new China playbookIt projects cumulative mobile-phone production of Rs 39 lakh crore and exports of Rs15 lakh crore during the scheme period, creating an estimated 600,000 new direct jobs.The previous PLI scheme helped production reach Rs 22 lakh crore and exports over Rs 7.5 lakh crore, creating 1.2 million jobs.The development comes just a week after the Centre expanded customs duty concessions on a range of machinery and components used in electronics manufacturing.

Dixon Technologies, India's largest domestic contract manufacturer of smartphones, IT hardware and television sets, is expected to benefit from lower input costs. The customs duty relief is likely to improve unit economics, support margins and aid the company's continued expansion in its mobile and electronics manufacturing businesses. Dixon-Vivo JVLast week, Chinese smartphone brand Vivo Mobile India received the long-pending government approval to form a joint-venture partnership with Dixon for manufacturing of smartphones.Both companies had signed a binding term sheet in December 2024 under which the electronics manufacturer will hold 51% of the share capital, while Vivo India will have 49% share. The joint-venture entity will act as the original equipment manufacturer (OEM) of electronic devices including smartphones for Vivo Mobiles in India. The entity can also engage in manufacturing for other brands, Dixon said.What are experts saying?Emkay raised its target price to Rs 15,200 (11% upside) from Rs 13,477 while maintaining a Buy rating on the counter. The brokerage said regulatory approval for the 51:49 joint venture with Vivo removes a key overhang and paves the way for large-scale manufacturing of Vivo smartphones.