Dixon Technologies (India) Limited

Saurabh Gupta

CHIEF FINANCIAL OFFICER, DIXON TECHNOLOGIES INDIA LIMITED

Naval Seth

EMKAY GLOBAL FINANCIAL

INR 2,856 crore

ll performance for the first quarter. Consolidated revenues for the quarter ended June 30, '22 was INR 2,856 crore against INR 1,867 crore in the same period last year, which is a growth of 53%. Consolidated EBI

INR 1,867 crore

irst quarter. Consolidated revenues for the quarter ended June 30, '22 was INR 2,856 crore against INR 1,867 crore in the same period last year, which is a growth of 53%. Consolidated EBITDA for the quarter was

53%

'22 was INR 2,856 crore against INR 1,867 crore in the same period last year, which is a growth of 53%. Consolidated EBITDA for the quarter was INR 101 crore against INR 48 crore in the same period l

INR 101 crore

in the same period last year, which is a growth of 53%. Consolidated EBITDA for the quarter was INR 101 crore against INR 48 crore in the same period last year, a growth of 108%, owing to lower base year-on-y

INR 48 crore

ast year, which is a growth of 53%. Consolidated EBITDA for the quarter was INR 101 crore against INR 48 crore in the same period last year, a growth of 108%, owing to lower base year-on-year due to pandemic

108%

A for the quarter was INR 101 crore against INR 48 crore in the same period last year, a growth of 108%, owing to lower base year-on-year due to pandemic effect. We have also foreign exchange loss of IN

INR 12 crore

8%, owing to lower base year-on-year due to pandemic effect. We have also foreign exchange loss of INR 12 crore. Excluding that EBITDA would have been INR 113 crore at 3.9% EBITDA margin. Consolidated PAT for

INR 113 crore

effect. We have also foreign exchange loss of INR 12 crore. Excluding that EBITDA would have been INR 113 crore at 3.9% EBITDA margin. Consolidated PAT for the quarter was INR 45 crore against INR 18 crore in

3.9%

also foreign exchange loss of INR 12 crore. Excluding that EBITDA would have been INR 113 crore at 3.9% EBITDA margin. Consolidated PAT for the quarter was INR 45 crore against INR 18 crore in the same

INR 45 crore

EBITDA would have been INR 113 crore at 3.9% EBITDA margin. Consolidated PAT for the quarter was INR 45 crore against INR 18 crore in the same period last year, which is a growth 150%. Now I'll share with y

INR 18 crore

en INR 113 crore at 3.9% EBITDA margin. Consolidated PAT for the quarter was INR 45 crore against INR 18 crore in the same period last year, which is a growth 150%. Now I'll share with you the performance an

150%

the quarter was INR 45 crore against INR 18 crore in the same period last year, which is a growth 150%. Now I'll share with you the performance and the strategy in each of the verticals going forward

“Now I'll share with you the performance and the strategy in each of the verticals going forward.”

“The demand in this business is normalizing led by liquidation of inventory in the channel, and reduction input prices, which will result in improved revenues and profitability in the current quarter and the next quarter.”

“We have 160-odd models in semi automatic category, ranging from 6 kgs to 14 kgs with annual capacity of 2.4 million as our additional infrastructure footprint in Dehradun will be ready in couple of months.”

“Now we're introducing an economy series, which will be launched by end of Q2, and the volumes are expected to grow up significantly in the coming months.”

“In this financial year, we're targeting almost 275,000-odd in the next financial year, the kind of product portfolio we have and also the way the order book is looking, one is confident that one will be able to utilize the capacity up to 75%, 80%.”

“And can we expect margin improvement or margins to improve in this category from the 2% to 2.5% level?”

“So we feel that as far as the volume is concerned, there will be some growth, but not very buoyant growth in this particular vertical.”

“And how should we see things going forward?”

“And sir, when we think about the LED TV vertical, did I understand correctly that you're mentioning that while there will be some growth, it is not going to be very buoyant.”

“In Dixon case, at least there will be some growth because we have had new customer acquisitions.”

Saurabh Gupta

15

Unidentified Analyst

13

Atul Lall

10

Moderator

6

Naval Seth

3

Renu Baid

1

Aditya Bhartia

1

Bhavin Vithlani

1

Sujit Jain

1

Aditya Kondawar

1

Naval Seth

Dixon Technologies India Limited July 27, 2022 Ladies and gentlemen, good day, and welcome to the Dixon Technologies India Limited Q1 FY'23 Earnings Conference Call hosted by Emkay Global Financial Services. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call please signal the operator by pressing „*‟ then „0‟ on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Naval Seth, Emkay Global Financial Services. Thank you, and over to you, sir. Thank you, Lizann. Good evening, everyone. I would like to welcome the management and thank them for this opportunity. We have with us today Mr. Atul Lall, Vice Chairman and Managing Director; and Mr. Saurabh Gupta, Chief Financial Officer. I shall now hand over the call to the management for their opening remarks. Over to you, M

Atul Lall

Thanks very much, Naval. Good evening, ladies and gentlemen. This is Atul Lall, and we also have on the call today, our CFO, Saurabh Gupta. Thank you very much for joining this earnings call for the quarter ended June 2022. Coming to our overall performance for the first quarter. Consolidated revenues for the quarter ended June 30, '22 was INR 2,856 crore against INR 1,867 crore in the same period last year, which is a growth of 53%. Consolidated EBITDA for the quarter was INR 101 crore against INR 48 crore in the same period last year, a growth of 108%, owing to lower base year-on-year due to pandemic effect. We have also foreign exchange loss of INR 12 crore. Excluding that EBITDA would have been INR 113 crore at 3.9% EBITDA margin. Consolidated PAT for the quarter was INR 45 crore against INR 18 crore in the same period last year, which is a growth 150%. Now I'll share with you the performance and the strategy in each of the verticals going forward. In consumer electronics, we had r

Renu Baid

Dixon Technologies India Limited July 27, 2022 My first question is on the Lighting segment. We have seen margins recover a bit, but still they seem to be relatively low. Now that the commodity costs are also have inch out, what is the outlook in terms of the margin profile in this segment? And have you started seeing demand or volume offtake improving in this category? And how is the outlook here? You see, undoubtedly, the prices of inputs and components have started softening, and it's on a highly positive note. But one is carrying certain inventory, and I think the actual benefit of this particular softening will start reflecting from Q3 of this financial year. It will become better from Q2, but the actual benefit would start reflecting in Q3. Also, the demand has been slow in Q4 of last financial year and Q1 of this financial year. Now one can see an uptick, and the order book looks better. Now is it going to come back to normal? In the current quarter, I don't think so. But would

Atul Lall

Dixon Technologies India Limited July 27, 2022 incremental volume growth for us ahead of the market growth? And can we expect margin improvement or margins to improve in this category from the 2% to 2.5% level? Because the market demand situation LED TV market continues to be challenging. So we feel that as far as the volume is concerned, there will be some growth, but not very buoyant growth in this particular vertical. But because we have migrated and a significant increase would take place in our ODM, JDM solution business, there would be a margin improvement. And we should be somewhere between 2.9% to 3%.

Atul Lall

Sir, my first question was on the lighting vertical. I'm sorry, I was facing some audio issues. So I'm not sure if you drilled on to that in your opening comments. In the lighting vertical, we have seen a fairly sharp slowdown and challenging conditions in the last few quarters. When we look at some of the brand owners, while they also appear to be facing certain challenges but the kind of revenue declines or revenue slowdown the we are seeing, it is not that start with most of the brand owners. So I just want to understand what really is happening over there? And how should we see things going forward? So to be candid, when this kind of situation arises, a combination of both external and internal factors. So we had built up a large inventory, and the inventory prices started coming down a bit to suffer because of that and also the competitive intensity increased. So we face these challenges. And we have a significant internal organization changes in LED lighting vertical. We have a n

Aditya Bhartia

Right. And for the IT hardware space, sir, given that the PLI scheme is likely to be revised, do you think that will be opening up many new opportunities? Or is it that D ixona® The brand beh,nd brands