Dixon Technologies increases by more than 3% following CLSA’s target price increase.

In early morning trade on Tuesday, December 19, shares of Dixon Technologies were up more than 2%, closing at Rs 6,403.85 a share on the BSE. The stock rose 3.4% to reach values of Rs 6,483.6 at the peak of the day.

The global brokerage CLSA kept its ‘outperform’ rating on the counter and raised its target price to Rs 7,070 from Rs 5,675 before, which set off the rise in the consumer electronics major.

According to the brokerage, Dixon’s recent laptop manufacturing arrangement with Lenovo has increased its addressable market. Through the acquisition, the business can enter the IT hardware market, for which it already has center clearance for the PLI (Production-Linked Incentive) scheme.

But in addition to assembly, more localization is needed in order to be able to access incentives. According to the brokerage, Dixon believes that backward integration will be essential to the company’s next phase of growth.

The Life Insurance Corporation of India (LIC) reduced its stake in Dixon Technologies (India) on Monday, reporting in a BSE filing that it had reduced its ownership from 29,97,913 equity shares to 17,94,395 equity shares, or 5.012 percent to 3 percent of the company’s paid-up capital.

Dixon Technologies’ stock has returned 58.8% over the past year, outperforming the BSE Sensex. On December 12, the stock reached an all-time high of Rs 6,765.

The stock has produced multibagger returns of 140% over the past three years.

Dixon Technologies is a solutions and product firm with an emphasis on design. The company manufactures goods for the Indian markets of mobile phones, lights, and consumer durables.

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