Dixon Tech bets on healthy orderbook; targets Rs 17,000-17,500 cr revenue in FY23

Taiwanese IT hardware firm Acer has roped in domestic electronic manufacturing services firm Dixon Technologies for making its laptops in India, both companies said in a joint statement on Wednesday. The facility will have a capacity to manufacture up to 5 lakh Acer laptops annually.

Dixon Technologies is one of the contract manufacturers that has qualified for the PLI scheme for IT hardware.

In an interview with CNBC-TV, Atul Lall, MD of Dixon Technologies India, discussed the tie-up with Acer and the company's outlook.

He said, “It is a big step for us. We are one of the beneficiaries of the PLI scheme of IT hardware. Under this scheme, we have tied up with Acer which undoubtedly is an iconic brand. So, we have started manufacturing the laptops for Acer.”

On revenues, Lall said, “The revenue targets in this case are Rs 300 crore, Rs 600 crore, Rs 1,600 crore and Rs 2,400 crore. So I feel in year one, we should be able to achieve the minimum threshold of Rs 50 crore but from year two onwards, the upward ceiling described in PLI scheme of Rs 600 crore, Rs 1,600 crore, and Rs 2,400 crore, we should be able to achieve.”

As far as capex is concerned, their assets are fungible as prescribed under the PLI scheme- it would be almost 20 crore, Lall shared.

He mentioned that the company is targeting revenues in the range of Rs 17,000-17,500 crore in the next fiscal.

On orderbook, he said, “On mobile, we have a very healthy orderbook and we are confident of surpassing the upward ceiling under the PLI scheme. The new vertical of laptops, we are also going to kick in our telecom branch in which we have a JV with Bharti for IoT devices. Then, we are also launching monitors, LED ones which is going to happen in the next quarter.”

Lall added, “Then there is going to be growth in each one of our verticals. We have just inaugurated a fully automatic top loading washing machine plant in which we have a strategic tie-up with Bosch. So, across all verticals, there are triggers, these new verticals are going to help us achieve this number.”

On raw material price pressures, he said, “Undoubtedly there has been a pressure because of the commodity price increase and there is a certain lag in passing on the price increase to our principals. Lately, however, I am seeing that both on the commodity pricing side and also on the fare side, there is some kind of softening. So in the short-term, there will be pressure on margins, but I think over a period of time, we should be able to pass it on to our principals.”