Dixon Technologies expects smartphone production to reach 40 million units this year

Dixon Technologies expects to produce around 40 million smartphones in the fiscal year 2025-26 (FY26), with plans to scale up further in the next financial year, said Director-Finance and Group CFO Saurabh Gupta.

“My sense is we had projected a volume of almost 40 million smartphones for this year. I think we are on track for that,” Gupta said. “In the first six months, we have done broadly 20-odd million.”

He added that Dixon works with most major clients in the Android ecosystem. “There can be some pluses and minuses, but broadly we are working towards achieving that 40 million number for this year and hopefully 60-65 million for the next financial year,” he said.

Dixon Technologies, an Indian multinational electronics manufacturing services company, reported its July-September 2025 quarter results after market hours on October 17. The company, which has a market capitalisation of ₹99,478.41 crore, has seen its shares rise over 6% in the past year.

These are edited excerpts of the interview.

Q: The guidance on the mobile phone volume side was about 15% growth. You have done about 13%, and in the market, the chatter has been all about Motorola, which is your biggest client, and the deceleration that's happening in the Motorola business. So, just shed some light on it, and if you could assuage these concerns about the mobile phone volume.

A: We had projected a volume of almost 40 million smartphones for this year. I think we are on track for that. In the first six months, we have done broadly 20-odd million. Within the customers - we pretty much work with all the customers in the Android ecosystem - there can be some pluses and minuses, but broadly we are working towards achieving that 40 million number for this year and hopefully 60-65 million number for the next financial year.

Q: Give us a few more details. How much of volumes would the Longcheer JV contribute in the coming year? And also, do you see a higher amount of volume shift into the JV from long-term?

A: Our JV should be operational by around April 2026. We have taken a new facility in Noida, and we are expecting closer to 9-10 million volumes. There can be an upside to those volumes, but the business plan is still being worked out. However, 9-10 million is something that we are absolutely confident about for the next financial year.

Q: How much will exports contribute, both this year and next?

A: In the first three months, we did exports of 2.8 million this year. Last year, we were at a very small number, so, the export numbers have grown. Hopefully, in the next six months, the numbers should also grow for exports. My sense is, out of that 60-65 million, broadly 8-10 million can come from exports, if not more.

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Q: What about margins across businesses? You've seen some expansion - so mobile, EMS, consumer electronics, home appliances - all have seen anything between 10 basis points (bps) and 40 bps expansion in margins. Could you provide some amount of guidance on how this trend will move from here?

A: We are broadly at 3.7-3.8% for the first six months. My sense is that should be the rate for the next six months as well. So broadly, we should land up at a similar number for this financial year. But with more backward integration play, the backward integration should continue to add to our margins. Our expansion in the refrigerator portfolio should add to the margin profile, along with the overall operating leverage benefit. So, my sense is, next year, because of this backward integration, we can expand the margins anywhere between 50 bps and 60 bps. A large part of that margin expansion will happen in the financial year 2026-27 and 2027-28 because, by that time, most of the backward integration, especially in mobiles and IT hardware, will have been completely ramped up and stabilised. So, we are looking for good margin expansion in FY27–28.

Q: So 2027-28 (FY28) - this backward integration we’ve spoken about earlier as well - should deliver what range? Could we by then see 80 to 100 basis points bump in margins from where we are?

A: Our numbers indicate that it can be a 100 to 120 bps margin expansion in FY27-28, part of which - about half - should get reflected broadly in FY26–27.

Q: Let’s talk about the joint ventures as well, particularly the ones you are getting into with Chinese entities. The market is eagerly awaiting updates on the JV with HKC for display modules and with Vivo. Have all the permissions and approvals come through? When do these go off the ground?

A: It’s progressing very well. There has been a lot of back and forth on answering queries from various ministries, but we feel confident that the approval should come in November, in the coming weeks. We are absolutely geared up for that. We plan to consolidate our numbers from Vivo, hopefully in quarter four, and HKC construction is ongoing. The machines will be installed by the end of December, trials will happen in quarter four of this fiscal, and mass production will begin in quarter one of the next fiscal. We are absolutely on track. Our acquisition of Q-Tech happened on September 26, so we have started consolidating the financials, which will start to play out in quarter three and quarter four. We’ll continue to deepen the level of manufacturing, expand margins and capacities, and also take advantage of the component PLI scheme.

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Q: Overall top-line growth for this year and the revenue mix. Will there be any pickup in your consumer electronics business, which has been sluggish?

A: Yes, consumer electronics has been sluggish because TV demand was muted this quarter, mainly on account of the postponement of purchases due to goods and services tax (GST) announcements. Hopefully, we should be able to recoup some of that in quarter three. My sense is the overall revenue guidance should be closer to 30-35% for this year, but we are definitely looking for large growth next financial year. Between FY24-25 and FY26-27, we should be broadly able to double our revenues.

Q: And profitability - last year was around ₹700 crore, which was double the previous year. You’re a ₹1 lakh crore market-cap company now, and most analysts expect that by FY28 you’ll do ₹2,200 crore in profit after tax (PAT). Is that possible? ₹700 crore last year to ₹2,200 crore by FY28?

A: Yes, it should be in that range.

Watch the interview in the accompanying video

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