Why Dixon Share Price Is Falling Today: The Real Reasons Behind the Slide

Dixon Technologies, long touted as India’s premier electronics-manufacturing service (EMS) play, has seen its stock come under fresh selling pressure—down over 3% intraday on June 25. Here’s a deep dive into the forces driving today’s decline.

1. The Elephant in the Room: Major Clients Diversify Supply Chains

The most impactful news contributing to Dixon’s recent dip stems from a significant development regarding its largest client, Motorola. Global brokerage firm PhillipCapital recently downgraded its estimates for Dixon, citing rising competition in the mobile phone assembly sector. Motorola, Dixon’s largest “Make in India” customer, is no longer exclusive. After relying 100% on Dixon in CY24, Motorola diverted roughly 25% of its April–May production to Karbonn—and that share could swell to 35% by June. Even Longcheer, Dixon’s #2 client, has started routing about 2% of its volumes to Karbonn, adding fresh top-line and margin worries.

2. Sharp Brokerage Downgrades and Earnings Cuts

Philip Capital reiterated a “Sell” call on Dixon and slashed its price target from ₹11,077 to ₹9,085—the second-lowest Street view—citing intensifying competition in mobile assembly. It also trimmed its FY27 estimates by 4% for revenue, 6% for EBITDA, and 9% for PAT. Negative broker notes often trigger algorithmic selling and prompt cautious repositioning by fund managers.

3. Promoter Stake Sale Spooks the Street

Founder-promoter Sunil Vachani sold 16.7 lakh shares (2.77% of equity) through block deals worth more than ₹2,200 crore. While institutional buyers, including Motilal Oswal Mutual Fund, purchased most of the stock, large insider exits tend to spook retail and momentum investors, raising concerns about future selling pressure.

4. Disappointing Sequential Q3 Performance

In Q3 FY25, Dixon’s net profit plunged 47.5% quarter-on-quarter to ₹216.2 crore (from ₹411.7 crore), while revenue dipped 9.4% to ₹10,453.7 crore. The sharp QoQ slump exposed order-flow volatility and margin squeeze, prompting Jefferies to maintain an “Underperform” stance and Nuvama to cut its FY25–27 estimates.

5. Bearish Technical Indicators Gain Momentum

On the charts, Dixon has broken below its 5–, 10–, 20–, 50–, 100–, and 200–day moving averages. A “Double Top” pattern signals a potential trend reversal, the RSI languishes near 40 (neither overbought nor deeply oversold), and the rising ADX suggests the downtrend is strengthening. Immediate support sits around ₹13,800; failure to hold could drag the stock toward ₹13,330.

6. Looming Margin Headwinds Post-PLI

Investors are bracing for the PLI (Production Linked Incentive) benefits to phase out by FY26. With input costs trending higher and deeper backward integration still a work in progress, margin expansion may stall, adding a structural layer of uncertainty to Dixon’s earnings trajectory.

What’s Next for Dixon?

While the near-term landscape looks difficult, it is not all bad news for Dixon.

• Good Fundamentals (Historically): The company has consistently recorded strong earnings, and in its most recent quarters, it has experienced significant year-over-year growth in its profit after tax (PAT) and revenue (e.g., 379% YoY growth in PAT in Q4FY25).
• Diversification Efforts: Dixon is actively pursuing diversification strategies. Its upcoming joint venture with Vivo, for instance, could add substantial revenue (estimated ₹8,000 crore by FY27) and offer healthy double-digit margins, potentially offsetting some of the challenges in its existing segments. They are also investing in display module manufacturing and have secured new contracts with companies like Compal (for Google Pixel smartphones) and MoUs with Asus and HP India.
• PLI Scheme Beneficiary: Dixon has been a key beneficiary of India’s Production Linked Incentive (PLI) scheme, which aims to boost local manufacturing. While the mobile PLI scheme is set to end by FY26, the company is looking into a potential component PLI scheme and other government incentives.

Recent Brokerage Actions & Target Prices for Dixon Technologies

Brokerage ratings and their associated target prices are powerful drivers of short-term stock movements, reflecting expert opinions on prospects. The table below highlights the diverse views of financial analysts, which contribute to the stock’s volatility.