"Thank you. Very good evening to everyone.

Welcome to the Dixon Technologies Q3 FY26 earnings call. Today we have the management being represented by Mr.

Atul Lall, Vice Chairman and Managing Director, and Mr. Saurabh Gupta, Director of Finance and Group CFO.

At this point, I will hand the floor to Mr. Lall for his initial remarks, post which we will open up the floor for Q&A.

Thank you, and over to you, sir." "Thank you, Tanay.

Good evening, everyone. This is Atul Lall, and joining me today is our Director and Group CFO, Saurabh Gupta."

"Good evening, everybody." "And we thank you all for taking the time to join us to discuss our performance and progress for third quarter financial year 2025-2026..."

- Tanay Shah: Tanay Shah introduced himself / was introduced by operator as "Tanay Shah from DAM Capital". - Atul Lall: Introduced as "Mr.

Atul Lall, Vice Chairman and Managing Director", "Atul Lall (Vice Chairman and Managing Director):". - Saurabh Gupta: Introduced as "Mr.

Saurabh Gupta, Director of Finance and Group CFO", "Saurabh Gupta (Director of Finance and Group CFO):". - Questioners: - Ankur Sharma (HDFC Life): "The first question comes from the line of Ankur Sharma with HDFC Life.

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Morgan): "The next question comes from the line of Bhavik Mehta with J.P. Morgan.

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Please go ahead." -> "Nitin Kaushik:" "begin each speaking turn with the speaker's name and role when they are stated on the call (e.g.

'John Smith (CFO):'). When the operator introduces the next caller by name and firm, or hands the call to a named person ('I will now turn the call over to Jane Doe, CFO'), use that identity for the immediately following turn.

Reuse exactly the same label whenever the same voice returns." " (or "Speaker Name (Role): "), plain text, no markdown formatting (no bolding, no code fences, no headers).

Ladies and gentlemen, good day, and welcome to the Dixon Technologies Q3 FY26 earnings conference call hosted by DAM Capital Advisors. 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 an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded.

I now hand the conference call over to Mr. Tanay Shah from DAM Capital.

Thank you, and over to you, sir. Thank you.

Very good evening to everyone. Welcome to the Dixon Technologies Q3 FY26 earnings call.

Today we have the management being represented by Mr. Atul Lall, Vice Chairman and Managing Director, and Mr.

Saurabh Gupta, Director of Finance and Group CFO. At this point, I will hand the floor to Mr.

Lall for his initial remarks, post which we will open up the floor for Q&A. Thank you, and over to you, sir.

Thank you, Tanay. Good evening, everyone.

This is Atul Lall, and joining me today is our Director and Group CFO, Saurabh Gupta.

Good evening, everybody.

We thank you all for taking the time to join us to discuss our performance and progress for third quarter financial year 2025-2026. Key highlights for the quarter are as below.

Consolidated operating revenues for the quarter ended December 31, 2025, was ₹10,678 crores against ₹10,461 crores in the same period last year. Consolidated operating EBITDA for the quarter was ₹421 crores against ₹398 crores in the same period last year.

Consolidated operating PAT for the quarter was ₹214 crores against ₹217 crores in the same period last year. While the electronics market faces near-term headwinds from commodity inflation and memory price increase, we continue to focus on building scale, bringing operational efficiency, strengthening relationships with customers, focusing on backward integration, and diversification around the core electronics business to navigate the environment.

One important external headwind is a sharp increase in memory prices globally, driven by AI and data center demand, reallocating the memory capacity away from traditional consumer devices. Industry reports indicate that conventional DRAM contract prices have already risen sharply over the last two quarters, with further increases expected in mid-2026.

For smartphones and PCs, memory has moved from being a relatively small line item to one of the most sensitive parts of the bill of materials, especially for the lower-priced devices. Our returns remain robust with industry-leading ROE and ROCE, low leverage, and a negative working capital cycle, which gives us sufficient headroom to invest in capacity, components, and new categories.

Our working capital cycle remains at negative 7 days, complemented by a strong balance sheet reflecting a net debt position of ₹246 crores. We maintain our return ratios, with ROCE at 45.1% and ROE at 32% as on December 31, 2025, demonstrating the fundamental strength and stability.

Dixon has been selected as an ECMS beneficiary for camera modules and optical transceivers, marking an important milestone in our expansion into components manufacturing and reinforcing our strategy to move up the electronics manufacturing value chain. We expect to receive ECMS approvals for display modules and enclosures shortly.

We have built a strong foundation as India's leading homegrown EMS company and now are steadily transforming into a more integrated, design-oriented, component-backed manufacturing partner across consumer, industrial, and strategic electronics. Now I'll share with you the business performance and insights in each of the segments.

Mobile and EMS: revenue for the quarter for mobile and EMS business was ₹9,750 crores and operating profit of ₹350 crores. As per industry reports, Indian smartphone market in Q3 fell by 7% year-on-year, and the decline reflected the usual post-festive slowdown and was also stressed majorly by elevated channel inventories for brands, depreciating rupee, softening mass market affordability, and moderation in demand due to persistent supply constraints and rising cost of memory chips.

The potential cutback in smartphone shipments comes amid smartphone brands' struggle with an unfolding supercycle in the global memory sector. The world's top suppliers are shifting their capacity for artificial intelligence applications, resulting in a supply squeeze for the smartphone segment.

Our new 400,000-square-foot facility for 74-26 Longcheer JV for manufacturing of smartphones and other electronic devices is expected to start operations by Q2 of '26-27. Construction of a 1-million-square-foot facility in Noida with higher capacities for our anchor customers is expected to be completed by Q1 of financial year 2026-2027 and mass production to start by Q2 of 2026-2027.

Construction of our facility for display modules in 74-26 JV with HKC is nearing completion. In the first phase, we are creating a capacity of 24 million per annum for smartphones and 2 million units per annum for notebooks, largely captive consumption, and automotive combined, and trial should commence by Q2 of next fiscal.

In the second phase, we'll enhance the capacity to 55 million units per annum, largely captive for smartphones, and foray into displays for LED TVs also. We have received a very encouraging response from all the major automotive players.

We're extending the capacities and deepening the level of manufacturing of camera and fingerprint modules for smartphones and target to expand volumes of smartphone camera modules from 40 million units in this fiscal to 190 to 200 million units per annum. We remain confident of getting the PN3 approvals for our JV, Vivo JV, soon.

Consumer electronics, LED TVs, and refrigerators: revenue for the quarter was ₹567 crores with an operating profit of ₹24 crores. This quarter witnessed a temporary moderation in industry demand, primarily driven by post-Diwali seasonality, withdrawal of consumer offers, and elevated channel inventories.

Despite these short-term headwinds, our market position is strengthened meaningfully, and remain optimistic for recovery in volume for Q1 of next fiscal as channel inventories normalize. Our strategy is to increase market share in large-screen TVs, smart and connected models, and platforms where we can differentiate on cost, quality, and speed.

We have launched production of high-end Mini and [Mini LED?] TVs, enabling our customers to tap into fast-growing premium segments, and to continue to expand our technology leadership by offering a comprehensive operating system portfolio and are the first one to introduce features such as in-built karaoke functionality and remote finder, enhancing end-consumer engagement and product distinctiveness.

Refrigerators: Q3 is seasonally the weakest quarter for the refrigerator industry, with demand typically ramping up from the January ahead of summer season. The softness was further stressed by the transition to the new energy efficiency norms effective January 2026, resulting in brands consciously limiting inventory of current norm models due to impending minus one-star downgrade.

Despite these industry-wide constraints, we continue to strengthen our product portfolio and customer base. Alongside our strong presence in direct cool refrigerators, we successfully introduced minibars and 50-liter and 100-liter categories, which has received an extremely encouraging market response with entire available capacity already booked.

We are also onboarding leading brands, including higher-end this segment. We introduced a new 170-liter low-cost refrigerator module targeted at export markets, which has seen healthy traction across both export and domestic channels.

To support future growth, we have commenced construction of phase expansion facility that is another 375,000-square-foot facility, which will enable manufacturing of two-door refrigerators, deep freezers, visi coolers, and side-by-side refrigerators. Home appliances: revenue for the quarter was ₹355 crores, operating profit was ₹41 crores with an operating margin of 11.5%.

Washing machine portfolio demonstrates full ODM capabilities right from design support to testing and manufacturing. We continue to add capacities, introduce new product categories and more features and value-added offerings and increasingly focusing on localization of critical components.

Our expansion into new category of semi-automatic washing machines in 16 kg and 18 kg capacity is completed, and mass production to start in March '26, which will be the first across the industry. Our new Tirupati facility for front-loading washing machine is ready, and mass production to start by Q2 of financial year 2026-2027 with annual capacity of 300,000 units.

Production started for robotic vacuum cleaners for Eureka Forbes with healthy order book, and we are actively exploring other appliances like microwaves and kitchen chimneys. We're driving several initiatives to expand automation across operations while strengthening the industrial engineering function to improve efficiency, productivity, and cost optimization.

Lighting: the JV with Signify, Philips, continues to deliver exceptional results, and partnership is driving robust, higher double-digit revenue growth, enabling better asset utilization and deepening localization levels. We have significantly enhanced our market share in LED bulbs, battens, downlighters through this partnership and positioning us firmly at the center of ongoing consolidation within the Indian lighting industry.

We're seeing several small and sub-scale players in the lighting ecosystem struggle to keep pace with the required investments in technology, quality, and compliance, which is creating a favorable comparative backdrop for a well-capitalized integrated platform like ours. We are moving up the value curve with an increasing focus on the premium and technology-led lighting solutions, which supports higher realizations and an improving margin profile with the medium term.

Leveraging our manufacturing expertise, we see strong potential to export high-quality LED lighting products to markets such as Europe, UK, UAE, and US. We continue to focus and invest in automation to further boost operational excellence and keep investing in backward integration to improve our cost efficiencies.

Telecom and networking products: home broadband penetration in India continues to grow at a very fast pace, and we have been continuously building up more capacities, and we also have a stable order book for our anchor customers on CPE devices, which will continue to be a major contributor to revenue. We have started manufacturing of highly complex telecom backhaul microwave radios for a US telecom brand.

We have localized components such as mechanicals, adapters, plastic moldings, and sheet metal. We have been selected as an ECMS beneficiary for optical transceivers in line with focus on diversifying in technologically advanced product categories and will start manufacturing next fiscal.

With continued momentum and developments in the segment, we target to further strengthen our market position with market share gains in the domestic market. Laptops, tablets, and IT hardware products: the segment saw a healthy uptick in revenues in the quarter, and we have a very strong order book for the next financial year and capacity enhancement is going on.

Our dedicated IT hardware product manufacturing unit in Chennai has successfully stabilized mass production of laptops and AIOs for HP, Acer, and Asus. We have bagged order for desktops from one of our customers and we'll start manufacturing in Q4 of this fiscal in Chennai, and also in active discussions with an existing customer for manufacturing of tablets.

The new facility being developed adjacent to our existing facility under our 60-40 JV with Inventec is near completion, and mass production of SSD and memory modules is planned to begin Q2 of 2026-2027, which will deepen the level of manufacturing and contribute towards improved margin in the segment. We are also in deep discussions with a JV partner for manufacturing of servers to capitalize on the fast-growing market.

Rexxam Dixon Electronics: Rexxam JV for AC PCBs continues to perform well and remains a strategic asset in our component portfolio. We expect a robust demand for ACs this season and would scale up our capacity by operationalizing our new upcoming Chennai facility by end of Q4 of current fiscal.

With that, I'll conclude with my remarks. Saurabh and I are happy to take any questions.

Looking forward to the same. Thank you.

Yeah. Hi, good afternoon.

Thanks as always for your time. A couple of questions on the cell phone side.

One, if you could just help us with volumes for Q3? More importantly, how do you see volumes for both '26 and into '27 versus the earlier guidance that you'd given us?

Yes, Ankur. The smartphone volumes for Q3 was around 6.9 million.

Overall in 9 months, we have done a volume of closer to 27 million.

Okay. Mhm.

Q4 volumes are expected to be somewhere between 7 to 7.5 million. For '26-27, the numbers are still being worked out.

The situation is slightly fluid because of the memory prices, and also we are confident and close to our government approval for Vivo. It's slightly premature to commit on a number for '26-27.

Fair. Sir, if you could just help us what's leading to this delay in the Vivo JV?

Is it just procedural? Is there anything else you can talk about?

Because it's been a while since we've been expecting this to come through.

I appreciate that, Ankur, but we feel that we are fairly close to it. It should happen shortly.

That's where we are.

Fair. Just on the margins, how do you really see margins more so with the PLI at least the original PLI benefits kind of going away as we head into '27.

How do you see cell phone margins? Obviously, I expect some delays in the ramp-up of our component JVs.

There, how do you see margins kind of shaping up? Maybe some dip in the first half and then catch up in the second half?

Follow-up would be, we're hearing about a second PLI also coming through for cell phones. If you could speak a bit on that.

Thanks.

Yes, Ankur. As we have been mentioning in our previous earnings calls also, the mobile business margins are closer to 3.5%, which has got pass-through of PLI as well, broadly 0.5%, 0.6% of our share of PLI which is getting consolidated in this margins.

One,

to say that PLI will get renewed or not with surety is very difficult to say right now.

Coming in there, Ankur and other stakeholders here, there are deep discussions happening between the industry and the government. We are optimistic about it.

To say anything with certainty, it's not a fair statement on my part. Are the discussions on?

Yes, the discussions on. Is there a positive response?

Yes, there is a positive response.

Is it an absolute certain thing to come in? No, it's

very difficult to say.

Government is engaged with industry. A lot of data has been shared.

Government is evaluating it. One view is, of course, they want to give more support to the sector till the time that component ecosystem gets created.

It's very difficult to say with surety. Assuming a case, a worst case, where it doesn't get extended, then half

a percent

of margins will get impacted in our mobile business, which we have communicated earlier as well. We feel confident that with our backward integration play, we will be able to not only overcome that margins, there will be additional margins which will come on account of backward integration play, but that would largely play out in '27-28.

Because both in QTech, we are doing a large capacity expansion, we are deepening the level of manufacturing, which will take us 6, 7, 8 months. Also the display, the machineries have been ordered, and some of them will get ordered in the next few months.

The trials, as communicated in the remarks, will happen somewhere in Q1. Mass production should start towards end of Q2.

There can be some quarters where the margin impact can reflect lower, assuming a case if the PLI doesn't get extended. But '27-28, we are absolutely confident that there should be a decent margin expansion largely on account of component play.

On the display side, QTech, the capacity expansion is already on. Finally, we're going to expand the capacity from current 40 million to almost 190 million.

In the display thing, the building is ready. The first set of equipment for 2 million per annum 2 million per month mobile phone capacity and 2 million per annum for display for notebooks and automotive is already arrived at ports.

It's going to take 2 to 3 months for installation. We feel that sometime by June, July the trials and then commercial production should start.

Hello. Are you there?

Okay. We can go to the next.

Hello? Sorry.

Can you hear me?

Okay. Sorry about that.

Yeah. Thank you.

A couple of questions. One is, Mr.

Lall, obviously, memory prices has been going up for the last two quarters. There were some news stories about display prices also kind of going up.

Seems like other parts, other components will also be impacted. In your opinion, how are the OEMs reacting to this?

Would policy some de-speccing? Whether, instead of 16 GB of memory, they'll probably go down to 12, keep the pricing the same.

Higher-end phones probably more price insensitive. Can you talk about that because I want to understand in that context how about your economics?

Would that stay stable? My second question is, reading about in some media reports about Motorola saying that they'll be using you for the camera module in their phones.

Congratulations on that. Have other OEMs also signed up, and if yes, can you name them?

Then I have a follow-up question.

On the first part of your question, as far as the unit economics is concerned, for us it's a pass-through. For us there is no impact as far as the value chain and impact on the margins is concerned on an absolute basis.

What happens is that when the price increases and increases so significantly, everybody is expecting an impact on the demand side. That's the concern area.

As you very aptly captured, one feels that the demand of the mid-segment and the lower segment is going to be impacted more. That leads to an uncertainty element in the whole business.

That's where we are. However, you know that as far as economics is concerned, for us it's a pass-through.

The second part of the question on the camera module, yes. In QTech, we are already supplying to Motorola, and we have got an extremely positive response from them for expanding this relationship with QTech.

In QTech, we're already supplying to various other brands. We're supplying to Vivo.

We're supplying to Samsung.

We're

supplying to Oppo. We're supplying to all the other brands.

They are a big supplier, Samit. They are part of the supply chain for most of the brands in the Android ecosystem.

In Android ecosystem, almost all the brands are our customers. The camera modules till now, which have been imported, you please appreciate the market of camera modules is approximately around 350 to 400 million, which is largely being serviced through imports today.

We want to capture and service that market through our QTech partnership.

Yes, and we'll probably hear more about it on February 1st when the government puts out the budget. Hopefully, there's going to be more incentives for localization.

My final question is In addition to

that, in QTech, we have also got the ECMS approval.

Right. My final question is, I think Mr.

Lall and Saurabh, there's been multiple dynamics in the business, right? I think all of us are trying to figure out what goes up, what goes down.

For example, just in the fact that phone prices are going up, artificially or mathematically, it'll look like your margins are coming down. Can you kind of lay out for us a couple of things, you obviously spoke about PLI headwind in case PLI 2.0 doesn't happen, and can you give us the timing of the Vivo JV so we can kind of model out the different margin scenarios and be able to get comfortable with what things could look like in '27-'28?

We feel that we are close to the Vivo JV. Because we are pursuing very deeply with the authorities.

To give a specific timeline is not that easy.

Yeah. No, I understand.

I was trying to get at more from overall perspective, multiple drivers right now: smartphone input costs going up, PLI getting pushed out. How could margins be going up and down in the next year, next 12 months?

We still feel that we should be able to have a margin of somewhere between 2.8% to 3.1%, 3.2% in our mobile phone business. That's how it's going to look like.

By the time we start integrating our backward integration play, and then margins would keep on going incrementally up month-on-month. The timeline for this I feel to start this operation of integration of components that we're doing is going to be 6 to 8 months.

Finally, we feel that almost 70%, 80% of our business would be integrated in the component landscape by '27-'28, which will lead to an overall expansion of margins. Here I'm talking about the scenario without PLI.

All right. Thank you very much.

Thank you.

Hi, sir. Good evening.

Sir, quickly on the disclosure side, in previous quarters, you used to give revenues from Ismartu, routers, and other segments, which we are not getting from this quarter. Any reason for that, why disclosure hasn't been given for this quarter?

No specific reason. This is a combined entity we look at, and Ismartu is also nothing but mobile phone business only.

We decided to consolidate and show as part of the mobile and EMS business. In case you're looking for separate numbers, you can have a separate discussion here.

I'll give it to you.

Sure, sir. Sir, secondly, on the mobile phone volume side, given that your component story, which obviously is a very good value addition, but it's a function of mobile phone volumes, right?

If the industry doesn't pick up, let's say, next 2 years, if memory prices continue to remain high and mobile phone volumes remain weak, how confident are you of the component story playing out the way you want it to?

You see, please appreciate on a conservative basis, the steps that we are taking for growth and consolidation in the mobile business for us, we should be, even on a conservative basis, somewhere around 60, 65 million units. That's a large play even for '27-28 for our component business.

If you're talking at 60, 65 million, I'm looking at 160, 170 million of camera modules. I'm looking at that number of displays almost 40 to 40 to 50 million.

I'm looking at almost 1.5 to 2 million of notebook displays. I'm looking at almost 2 million of automotive displays, both four-wheeler and two-wheeler.

For us, it's a large play. For some of the brands, Vipraw, we are also working on some increased order book on export side.

Those are deep discussions which are running. We are not in a position to share right now.

Is our backward integration strategy. There can be some quarters, and we clearly mentioned you that there can be 5, 6 months for us to ramp up this both the component play, but we feel absolutely confident about '27-28.

We feel confident about the numbers playing out. The only thing can be a couple of months or a quarter delay in execution, in integration.

That's all.

Sir. Sir, last question from my end.

Given that we were baking in 20 million volumes coming from Vivo for FY27, we still don't have approval. Do you maintain this 20 million number for Vivo for FY27, or there can be a downside risk to this?

See, we feel confident, but everything is subject to that how soon we're able to get this approval. Because after that, it's going to take a month or couple of months for integration.

Basically, the way you should look at it, the day we get the approval, then it'll take us at least 45, 60 days to consummate the transaction. There are a lot of CPs or conditions which need to be closed, which generally will take that kind of time.

Depending on what time we get the approval, yeah, so that's how the number will play out.

Sir, there is a risk, right, on Q1 numbers for Vivo then? Because we're already in Feb.

If you take 60 days, it means As

we mentioned, we feel confident that the Vivo approval should come in soon. We already told that it'll take 45, 60 days to close the transaction.

Now, of course, one can't Please appreciate that nobody can

Beyond that, it's very difficult to give us any more flavor on this.

Sure, sir. Thank you.

Thanks a lot.

Thanks for the opportunity. Sir, my first question on the mobile side is we had talked about addition of another global ODM.

If you can give us some sense where it is and when should we expect that to come through? Second, on the export side also, I think we were seeing a good traction, which also has slowed down.

How do you think exports can be in the next year given these challenges? Do we sort of benefit out of this European FTA deal which has got signed, and can we sort of look at more opportunities in that region as well?

Responding to the first part of the question, the discussions with a new customer are on. We feel confident that we should be able to conclude it by Q1 of the forthcoming fiscal.

Responding on exports: exports, we are pursuing two opportunities. Motorola, it's already on.

We have done exports of almost 4,000, 4,500 crores in the first 9 months. We feel we should be closing at almost 5,500, 6,000 crores in the current fiscal.

We feel that this is going to be the run rate in the forthcoming fiscal. With another large partner of ours, the export discussions are on.

Some exports for that brand are already happening. We are planning a new capacity for that to start with for 2G phones, and then we are going to graduate up to 5G 4G and 5G phones.

For this, a new facility is being planned down south in Tirupati. That's where we are.

We are still confident about building our export business in phones. Europe for phones, you see, there in any case, there is no tariff on phones in any of the countries.

EU FTA is not helping us. On EU FTA, we are still waiting for the fine print.

We feel that is definitely going to help us in our lighting business and also in our television business.

Got it, sir. Sir, last question is on the QTech.

If you can highlight what revenues have we booked for quarter three, and how should we think about the ramp-up? Because will you be continuing to sell to the external customers or gradually, it will only be for captive consumption?

How we should look at the QTech numbers this quarter and next year?

Siddhartha, QTech numbers for quarter three was closer to 400-odd crores. Broadly, we are looking at a similar run rate of 2,000 crores for QTech.

As we mentioned, in the next 8 to 9 months, we are significantly expanding the capacities. Last year, their volumes was 40 million.

This year also, the volume should be closer to a similar number of million. The idea is to take it up to almost 180, 190 million.

That's the reason the capacities are being expanded, more money is being put into the business. Also, the manufacturing process is being deepened.

We are deepening the level of manufacturing so that we are able to capture more margins in India. That is being done.

As of now, yes, they're supplying to some of our customers in the Android ecosystem. Some of the camera modules continue to be imported as well.

The idea is there's a big opportunity to ensure that once the capacities are there, then the import substitution can be a big opportunity in itself because we already have a large play with all that customers in the Android ecosystem. Our target, Siddhartha, continues to remain the same which we guided earlier.

The idea is to take this numbers up to 180, 190 million in next couple of years, do more manufacturing, increase the margins, and also we are also beneficiary now of the ECMS scheme. That's exactly what we're working on.

Got it, sir. Thanks a lot.

I'll come back in the queue.

Thank you.

Hi. Good evening, sir.

My first question is on amount that is due for PLI schemes. Could you just quantify roughly what amount may be due from government authorities in respect of PLI, and what would be our portion of it?

In the last few quarters, have we seen this amount increasing? Or delays happening in terms of payments?

Aditya, I don't have that number right now with me. I can share with you separately.

Broadly, we have been getting our PLIs from the government. We've been getting for telecom business, lighting business.

Some of them, of course, this year numbers will come in only after the closure of the financial year. Those numbers have been coming down.

I can share those numbers separately with you.

Sure. There's not been any unusual delay?

Typically, that 1-year kind of a delay that we used to have, it's a similar kind of a run rate that we are seeing? It's a similar thing.

See, we have already got the PLI up to September '25 in mobile, right? Understood.

Sure. My second question is on slightly longer-term growth levers.

Once Vivo is completely operational and we have camera modules, display modules completely up and running, what are the other areas that we can kind of think about? Specifically within this, if you could speak a little more on the export side.

You did mention about Motorola and an existing customer, but what can be opportunities beyond these customers on the export side? Within the component ecosystem, are there new component categories that we can also evaluate?

Aditya, apart from mobiles, mobiles, you deeply understand the next trigger of growth is Vivo partnership, acquisition of new customers, deepening of value addition by upping the game in display and also in camera modules. The new triggers of growth is our IT hardware business, wherein we are really ramping up the capacity and expanding the product portfolio beyond notebooks to AIOs, to desktops, tablets, and also printers.

We are going to be executing and it's going to operationalize our JV with Inventec in which we're going to start with SSD and memory modules. We are also going to be executing the project for servers.

That's a high-growth area. Our telecom business is doing extremely well.

This year, we should have revenues close to 5,200 crores. We are already the largest in India in CPE devices, namely routers, fixed wireless devices, IPTV set-top boxes.

In that, we have expanded our product portfolio, and we have bagged an extremely important order from US customers for complex telecom backhaul microwave radios. It is going to be both for domestic market and exports.

In this again, we're deepening the manufacturing and getting into the component side. We have already got the ECMS approval for SFPs and optical transceivers, in which we're going to get into the production mode in the forthcoming fiscal.

Then in our traditional businesses, in lighting, post our JV with Signify, the growth is extremely good. The consolidation is taking place in that industry, and we are migrating more and more to the premium-end products: high-end professional lighting products, luminaires, and downlighters.

In washing machines, we are expanding into the front loaders. That project, the building is ready.

The project is in the execution stage, and we're going to be setting up a capacity of almost 300k of front loaders. This is going to be operationalized by Q2 end of the forthcoming fiscal.

In refrigerators, we shared with you that we are expanding our capacity. We set up a capacity of 1.2 million.

Presently at 1.7, the new factory is under construction. It'll be expanded to 3 million.

We have already launched 50-liter and 100-liter. We have already started work on side-by-side, double doors, deep freezers, and visi coolers, it's going to be a complete complex portfolio.

Now we've taken a very senior resource in our South campus, very, very senior resource, for building our industrial EMS business. These are the growth trajectories.

As far as exports is concerned, one, of course, is mobiles. We feel we are in deep discussions at advanced stages with our strategic partners for building a large footprint down south for 2G phones and then 5G phones.

Also once this issue of Indo-US tariff and now with the Indo-EU tariff being optimized, we feel there's a tremendous scope for lighting exports now. As of now, these are all growth triggers for us for next 2, 3 years.

Sure, sir. In terms of tariffs, there'll be nothing from mobile phones perspective because pretty much everywhere mobile phones are exempt from tariffs.

Is that understanding correct?

That's right. That's correct.

Perfect. Thank you so much, sir.

Thanks, Aditya.

Hi. Thank you.

Just one question. Just wanted to understand what is the update on the Longcheer JV in terms of the ramp-up since it was formed in September.

How have the volumes been panning out this year and what could be the volumes expected in FY27?

Longcheer JV, we have already got the PN3 approval. We'll be signing the JV agreement by second week of February.

The factory construction is already started. Longcheer management team has come and parked themselves in India.

A new factory of almost 400,000 square feet is under construction. It's going to be operationalized by second quarter by first quarter end of next fiscal.

Initially, the capacity being created there is going to be of 18 million units. We're going to build up that business step by step.

We're also in discussions with them for expanding the product portfolio beyond mobile phones to other IoT devices and also smart glasses.

Okay. Thank you.

Thanks for the opportunity. Just wanted to check, assuming there are more delays in the PN3 approval, what is the plan B?

Do we continue to manufacture Vivo outside of JV as a pure contract manufacturer? How should we look at that part of the business?

We feel very confident. We are deeply involved in this process.

When I'm sharing with you this information, it's with fairly high level of confidence. Just bear with us and wait for us for some time.

For us, we are not thinking on a plan B because we feel confident the approval should come in.

Okay. In terms of the volumes, can you highlight how the December volumes for the current quarter was?

We see there is a sequential decline. I'm not asking for a specific number, but which are the brands where the decline is a bit sharper compared to the others?

As Mr. Lall mentioned in his opening remarks, the impact of memory prices has been largely intense on the low-end phones and the mid-end phones.

That's where we have seen some kind of demand impact.

As we shared with you the last quarter numbers was 6.8 million. Please appreciate for us to share that in which brands there was a decline, it'll be difficult for us to share that.

You can

Overall number, we have shared with you.

Sure. My last question, in your best estimate, has there been any market share loss for some of the largest customer where we also have export, given one more Indian partner has started manufacturing phones of that particular OEM?

Yeah. One of our anchor customers has started manufacturing with another EMS company.

On overall volume basis, our numbers have not come down as compared to the last fiscal. As a part of their internal strategy, certain percentage has been allocated to another EMS.

Just to let our numbers for that particular anchor customer that we're talking about would show a growth this year on the last year numbers as well. In the last 2 years, the number has significantly grown for us.

They

have grown from Indian market, and we have a lion's share of their business.

Perfect. Thank you so much, Saurabh and Mr.

Lall, and all the best for subsequent quarters.

Thank you.

Hello. Yeah.

Am I audible?

Sir, yeah, I lost your opening commentary on the lighting sector. Can you just repeat that?

I'll just read out the same. In lighting, our joint venture with Signify, that is Philips, continues to deliver exceptional results, and partnership is driving robust higher double-digit revenue growth, enabling better asset utilization and deepening localization levels.

We have significantly enhanced our market share in LED bulbs, battens, downlighters through this partnership and positioning us firmly at the center of ongoing consolidation within the Indian lighting industry. We're seeing several smaller and sub-scale players in the lighting ecosystem struggle to keep pace with the required investments in technology, quality, and compliance, which is creating a favorable comparative backdrop for a well-capitalized integrated platform like ours.

We are moving up the value curve with an increasing focus on premium and technology-led lighting solutions, which supports higher realizations and an improving margin profile over the medium term. Leveraging our manufacturing expertise, we see strong potential to export high-quality LED lighting products to markets such as Europe, UK, UAE, and US.

We continue to focus and invest in automation to further boost operational excellence and keep investing in backward integration to improve our cost efficiencies. This is what I had read out.

Yeah. Thank you so much for repeating that.

Just on thoughts for the current market scenario with respect to the EU FTA approval, what kind of opportunities do you see as a company as a whole and also in the lighting sector? Would you like to add some points towards it?

We are still waiting for the fine prints. We feel that the tariffs on lighting and LED TVs are a potential areas for us, and we feel that they're going to come down to practically zero.

That's an opportunity for us to capture the EU market.

That's great, fine. Thank you so much.

All the best for your future.

Thank you.

Hi, sir. Thanks for the opportunity.

My question was just on CapEx. If you can just highlight for FY26 and FY27 how much is the budget?

Secondly, I wanted to understand when you get the approval for Vivo JV, you would be having some kind of cash consideration being paid to acquire the manufacturing facilities. What could that ballpark number be from a CapEx standpoint that you would be investing?

First 9 months, the CapEx outgo is ₹720 crores. We feel that in the overall fiscal, it should be somewhere between ₹1,100, ₹1,200 crores.

It's not prudent for me to share the number for Vivo acquisition, but please be rest assured the balance sheet has adequate strength to work on that acquisition.

That number is confidential. We would not like to disclose that number of acquisition right now.

The CapEx is ₹700 crores. Last quarter may be another ₹300, ₹350, or ₹400 crores.

We will do a CapEx of closer to ₹1,100, ₹1,150-odd crores.

Sir, my last question was on IT and hardware products. We saw 1-year extension being given by the government.

Wanted to understand you have acquired these customers. How should one think about revenues for this year and next year for IT and hardware products?

This year, we feel the revenue should be in the range of ₹1,500-odd crores. We have a decent order book for next year.

The budgets are still being worked out. We feel that for next year, the numbers are going to be somewhere around ₹3,500, ₹4,000 crores.

The order book, Girish, looks very healthy. We will also freeze on those numbers in the next couple of months, but clearly, the brands have indicated a very strong order book.

Clearly, that is also a growing vertical for us with backward integration as well.

Sure. If I heard you correctly, sir, you mentioned that you've hired a senior resource for industrial business.

What segments are we talking here? Is it autos?

Is it other industrial products like smart meters? If you can just highlight what is the kind of capability building that is happening there?

It's going to be for automotive. It's going to be for industrial electronics.

We're not looking at energy meters as of now.

Sir. Thank you so much.

Yeah. Hi, sir.

Thank you for the opportunity. Sir, my first question is on the HKC JV.

Just need some clarification. PN3 approval required for the commencement of the facility as well?

In case the PN3 approval doesn't come by the time the facility is ready, can we still commence the production, or will it be in a wait for the

Hello. Is it better now?

Sure. Sir, my first question is on the HKC JV.

Just wanted to confirm whether the commencement of the facility that is under construction is contingent on the PN3 approval, or will still go ahead with the commencement in case that we don't receive the PN3 approval by that time?

No, it's not contingent on the PN3 approval. The construction is on.

In fact, the building has been handed over to us. The equipment has already landed at the port.

It's not contingent. For us, it's an important partnership, and PN3 approval is important for us.

Is the business contingent to PN3? No.

Sir, how will it work in case we don't receive the PN3 approval by then? How can we still commence the production from the same plant?

We can. First is that PN3 for HKC will definitely come through.

Second, we're confident that the ECMS approval also for display will come through. Third, that God forbid if it doesn't come through, it does not have any impact on execution and starting the production in the plant.

It'll be 100% subsidiary

of Dixon. Basically, we are not held back on any CapEx, and as we mentioned, the machineries have already been ordered.

Some of them are at port, some of them are getting ordered. There is absolutely no delay on account of not getting the PN3 approval till now, which we feel absolutely confident we will get.

Otherwise, the project is going the way it should be going.

Sure, sir. That's helpful.

Secondly, just wanted to check on the export orders for Ismartu. If I remember correctly, last year, we had been saying that we expect a 3 to 4 million of incremental export orders coming from Ismartu, particularly for the Africa markets.

Where do we stand now? Are we seeing those export orders getting executed this year or next year, or is there any delay there?

Some exports has already started. We would have done almost 1.2 to 1.5 million exports from Ismartu.

The discussions are on, and that's what I was talking about of building a large footprint down south for building that capacity. That's where we are on Ismartu.

Sure, sir. That's very helpful.

Thank you, and all the best.

Thank you.

Yeah. Hello.

Very good evening, Mr. Lall and Saurabh.

Just few questions. First is clarification on the pass-through bit.

You said for most of the memory pricing, I'm assuming that the INR depreciation here because there is some element of imports plus the metal inflation, all of this is a pass-through purely because we are a B2B. Is there a time lag between here typically how it works for ODM versus a brand?

Is there a possibility of temporary margin downturn and then finally get the pricing? How does that work?

No, Rahul. It's immediate pass-on.

There is no impact. This is a prescriptive business for us.

In any prescriptive business, the currency or commodity risk are immediately passed on. There is no impact on our business.

Perfect. The second is on the Longcheer.

You said it will commence sometime end of 1Q '27. Since the approvals are now received and you will be signing final documents, just wanted to understand till that point, the production for mobiles right now happening with them continues till that point, and then the existing business shifts to that JV and then that's where we start growing.

Is that understanding correct?

That's the right understanding, yeah.

Yes.

The business continues as is. Only Q2, it will move to the JV in the new plant with the shareholding that we had agreed, 74-26.

When we basically shift to the JV, there is no delay between that production, right?

No. No, there'll be no delay.

Okay. As of now, could you share for the mobile business right now, how much business shifts from a subsidiary business to the JV?

Those numbers are being worked out, Rahul. We feel that in '27 in '26-27, it'll be around 8 to 10 million units.

Okay. Got it, sir.

Last question was on CapEx. You said ₹1,100 to ₹1,200 of CapEx.

Just wanted to understand, I know that components have lower asset turns, higher margins, and similar ROCEs, but if you could just break down between the camera module, display module, and then the batteries, mechanicals, what kind of CapEx are we putting in each of these divisions? That will really help.

Thank you.

Yes, so, Rahul, display business across these four categories of smartphones, automotive, IT hardware, and in the second phase also, we're looking at TVs as well, we will be putting a CapEx of closer to ₹1,100, ₹1,200-odd crores. In QTech, the camera modules, CapEx intensity should be closer to ₹250, ₹300-odd crores.

Battery, we still have not worked out the numbers, and we don't have a technology partner right now as far as battery is concerned. We have not worked on that numbers.

And

SFP and optical transducers is ₹50 crores.

₹50 crores, yeah.

Mechanical enclosures is going to be another ₹50 to ₹60 crores.

Fiscal '27, is there a budget or any ballpark number, please?

It's still being worked out.

Okay. Perfect.

Thank you so much, and wish you all the luck for the rest of the time.

Thank you.

Thank you for the opportunity. Sir, first question is on the say mobile phone.

It's too early to guide for FY27. Generally, whatever say rolling plan we get from our clients, do we have any visibility on at least Q1?

Generally, this supply chain takes time, and so Is it fair to assume that at least in the first half, we should see de-growth of volumes? This is ex of Vivo JV, I'm just saying.

Or do we have pipeline to add clients?

See, because the memory supply is not only a question of pricing, it's also a huge question of availability. The brands themselves do not have an absolute clarity that how those numbers are going to pan out.

I think we'll have to wait and watch for another 2, 3, 4 weeks to arrive at those kind of numbers.

Understood. Second question on overall numbers.

Ballpark at the EBITDA level, pure mobile itself would contribute probably more than 60% of the EBITDA. Now in that backdrop, where all the CapEx of expansion on new categories would come on stream either in QT or Q2 or Q3 of '27, should we assume that at least in the first half of FY27, we should be either flattish or de-growth in terms of, say, revenue or EBITDA?

No, we'll still have growth. We are still working on the numbers because there is some level of uncertainty, but we feel that there'll be growth in spite of these challenges.

In the first half? Of the year.

Sure. Noted.

Sir, thanks a lot, and all the best.

Thank you.

Good evening, sir. Sir, am I audible?

Yes, you are.

Sir, my question was in previous concall, you reiterated that the company is targeting over ₹1 lakh crore revenue in the next 3 to 4 years. Given this current increase in the price of memories and RAM, would that guidance remain intact?

See, we are still very optimistic. We are aggressive.

We have got our plans in place. We've got our acquisition and JV partnerships in place.

We have our new growth category triggers in front of us, which we are committed to. We are committed to an aggressive growth for Dixon.

We feel confident about it. We feel committed to that.

It's also

disruptions

we have seen earlier also in COVID period. This supply disruptions keep coming, but that doesn't change the overall outlook for the company, overall growth plan for the company.

Of

course, can have some short-term challenges. We are continuously working not only on mobile phones, other verticals we are just continuous the growth plan in all our IT hardware, telecom business, lighting business.

Mobiles, of course, the largest trigger for our growth, but yeah, there are small supply chain disruptions which happen in business. Overall, nothing changes as far as long-term outlook is concerned.

Also, sir, the growth that you are guiding, I think majority of that would come from mobile phones and other EMS segment, right?

Yeah. Mobile undoubtedly is a large segment.

As we shared with you, we see a huge potential and upside in IT hardware. For margin expansion and also adjacency, we see a huge upside in our component business and we are just forayed.

We see a huge upside in telecom equipment business. We are also expanding our appliances business.

We are also expanding our lighting business. All these are triggers for growth.

We're getting into new categories of industrial EMS.

Thank you very much for participating in our earnings call. We really appreciate it, and thanks for your commitment and conviction for Dixon.

Really appreciate it. Thank you so much.

Thank you.

Thank you so much.