Dixon Tech shares jump 4% on govt nod to form JV with Vivo. What are experts saying?

The joint-venture entity will act as the original equipment manufacturer of electronic devices including smartphones for Vivo Mobiles in India. Shares of Dixon Technologies India jumped as much as 4% to Rs 14,027 on the BSE on Friday after 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 was pending government approval under the Press Note 3 of 2020 which mandates companies from countries sharing a land border with India to require government approval to invest in India. 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 (13%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. It has raised its Vivo production estimates to 6.5 million units in FY27 and 18 million units in FY28, resulting in 14% and 17% upgrades to its FY27 and FY28 EPS estimates, respectively. Emkay noted that Dixon already accounts for 45-50% of India's smartphone manufacturing capacity, with the Vivo JV expected to further strengthen its leadership. It also sees continued policy support for domestic electronics manufacturing, including the proposed Mobile PLI 2.0 scheme, as a key growth driver. The brokerage believes Dixon's strong return ratios, negative working capital cycle and robust cash generation justify its premium valuation and remains positive on the stock. Nomura has maintained its Buy rating on Dixon Technologies with a target price of Rs 13,813. It believes the regulatory approval for the joint venture improves volume visibility for Dixon, which currently accounts for around 18% of India's mobile manufacturing with approximately 33 million units in FY26. Assuming Dixon secures around 70% of Vivo’s production, Nomura estimates its annual output could rise to nearly 60 million units over the next few years, translating into a 35-38% market share. The brokerage expects the JV to commence operations from September 2026, with VMI production estimated at 12 million units in FY27, rising to around 17 million units in FY28 and increasing further in FY29. It believes Dixon has strong visibility of producing around 55 million mobile units in FY28, with scope for additional growth thereafter. Vivo is the country's leading smartphone player by volumes, with an estimated 23% market share and shipments of around 35 million units in CY25, up 15% year-on-year despite an industry-wide volume decline of around 2% following sharp price hikes. Dixon’s management has been bullish on the joint-venture agreement unlocking further manufacturing volumes for the company, which has become one of the largest smartphone makers in India.