Dixon has delivered a spectacular performance in its Q1 FY26 results. The company reported that its profit after tax (PAT) has doubled year-on-year, while revenue jumped by 95%. The biggest surprise came from the mobile segment, which grew by an impressive 123% — a clear response to the market's previous concerns about competitive pressures and slowing volume growth.
Group CFO Saurabh Gupta, in an interview with One Business Channel shared deep insights into what powered the growth, what lies ahead for the company, and how Dictk plans to navigate future challenges — including the expiration of the PLI scheme in March 2026.
Saurabh began by acknowledging that Dixon holds the largest mobile manufacturing infrastructure among domestic players in India, and their technological and execution capabilities are far ahead of many competitors. Despite worries around clients such as Motorola and some Chinese OEMs possibly shifting orders or reducing volume, the Q1 results have clearly demonstrated Dixon dominance and resilience. Gupta highlighted that their de-risking strategy involves allowing some of their business to go to competitors, but that does not undermine their position in the ecosystem. Most of the key brands are expected to stay with Dixon.
According to Gupta, the outlook for the mobile segment remains strong, with expectations of further growth in Q2. He emphasized that the company’s volume guidance for smartphones across FY26 and FY27 is robust, pointing to a possible 50% volume increase over the next two years. Moreover, margins have also expanded significantly in Q1 — a trend that is expected to continue going forward.
One of the primary drivers of margin expansion, he explained, is Dixon’s focused backward integration strategy. The company has been investing heavily in deepening its component manufacturing capabilities. This includes forging strategic partnerships and acquisitions aimed at increasing control over the supply chain.
Some of the major developments on this front include:
A major partnership with HKC for display manufacturing. These displays will be used across mobile phones, notebooks, automotive systems, and televisions.
The acquisition of Qtech — a global top-five player in the camera module space. Qtech already supplies to major brands across the Android ecosystem. The joint venture is expected to be finalized within the next two months, and its contribution will start reflecting in Dictk’s numbers thereafter.
A partnership with Chanching UI, a precision mechanical component supplier for both mobile phones and laptops. The regulatory approval for this deal is expected in Q3, with financial contributions beginning from FY26.
These moves are expected to significantly boost Dixons profitability. Gupta revealed that Qtech alone reported ₹2,000 crore in revenue and ₹150 crore in EBITDA last year. Dixon plans to invest ₹550 crore in Qtech under the government’s ECM PLI scheme to further deepen its manufacturing processes. With Dixon's large captive customer base in the Android ecosystem, this business is expected to scale rapidly.
The company’s internal projections show that Qtech’s revenue can be scaled from ₹2,000 crore to ₹5,000 crore in the coming years. Furthermore, the margins are expected to expand from 7% to 9%. Although these revenues won’t be added to Dixon’s top-line as they are meant for captive use, the impact will be clearly visible in improved profitability.
When asked about concerns regarding the PLI scheme’s expiry in March 2026, Gupta admitted that there would be a 0.6% EBITDA margin impact. However, he was quick to point out that the company has already invested over ₹1,000 crore in the mobile segment over the past five years, creating robust infrastructure, strong talent pools, and efficient systems. This foundation will support continued growth, even without PLI benefits.
Gupta is confident that the company can offset the loss of PLI incentives with operating leverage, scale benefits, and high-margin component businesses. In fact, he projects that even after accounting for the end of PLI benefits, Dixon can still achieve a net margin expansion of 120 to 130 basis points in the mobile business.
Since the mobile segment contributes nearly 80% of Dixon's overall revenue, this margin improvement will have a direct and positive impact on the company’s overall profitability. Moreover, as component integration ramps up in FY27 and FY28, the benefits will be even more pronounced.
On the valuation front, Gupta acknowledged that some market participants may view the stock as richly valued. However, he believes the company’s consistent performance, visible earnings growth, margin improvements, and long-term strategy justify the premium. The stock has been on a consistent upward trajectory, making new highs, and reflecting the confidence of long-term investors.
In summary, Dixon is executing well on all fronts — scaling its core business, improving margins through strategic backward integration, and investing for long-term sustainability. As the PLI regime winds down, Dixon is positioning itself to continue its growth story based on real structural advantages rather than short-term subsidies.
With robust Q1 numbers, a 123% surge in the mobile segment, aggressive investment in high-value components, and a clear margin expansion roadmap, Dixon is sending a strong signal to the market — it is ready for the next phase of growth.
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