Ladies and gentlemen, good day and welcome to the Dixon Technologies Q2 FY 2026 earnings call hosted by DAM Capital Advisors. As a reminder, all the 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 using star, then zero on your touch-tone phone. Please note that this conference has been recorded. I now hand the conference over to Ms. Bhoomika Nair from DAM Capital Advisors. Thank you and over to you, ma'am.
Yeah, thank you and good evening to everyone. Welcome to the Dixon Technologies Q2 FY 2026 earnings call. The management is being represented today by Mr. Atul Lall, Vice Chairman and Managing Director, and Mr. Saurabh Gupta, Chief Financial Officer. At this point, I'll hand over the floor to Mr. Lall for his initial remarks, post which we'll open up the floor for Q&A. Thank you and over to you, sir.
Thanks very much, Bhoomika. Good evening, everyone. This is Atul Lall, and joining me today is our CFO, Saurabh Gupta.
Good evening, everybody.
We thank you all for taking time to join us to discuss our performance for second quarter 2025-2026. Key highlights for the quarter are as below. Consolidated adjusted revenues for the quarter ended September 30, 2025, were INR 14,858 crore as against INR 11,528 crore in the same period last year, a growth of 29%. Consolidated adjusted EBITDA for the quarter was INR 564 crore against INR 420 crore in the same period last year, a growth of 34%. Consolidated adjusted PAT for the quarter was INR 323 crore against INR 236 crore in the same period last year, a growth of 37%. As you would be aware, the announcement of the reduction in GST rates in mid-August led to a significant postponement of purchases across the trade and consumer channels.
Between August, May, and 21st September , most customers and retailers deferred buying decisions in anticipation of the lower post-cut prices. Although demand began to normalize after the new GST rate came into effect on September 22, the short window of nine days before the quarter end was insufficient to fully recover the deferred volumes. As a result, our Q2 top line reflects this time distortion specifically for LED TVs, refrigerators, and washing machines. Upholding our focus on financial discipline, we efficiently managed our working capital cycle at negative six days, complemented by a strong balance sheet reflecting a net debt position of INR 203 crore. We continue to demonstrate consistent improvement in our return ratios with return on capital employed of 49.1% and return on equity at 34.3% as on September 30, 2025, reflecting the inherent strength and resilience of our business model.
In the first phase of our 74:26 JV with HKC for display modules, we are creating a capacity of 24 million per annum for smartphones and 2 million per annum for notebooks, which would be for 76% of captive consumption. In the second phase, we will enhance this capacity to 60 million units per annum for smartphones, which will account for almost 80% of the captive consumption, and we are also foraying into display for LED TVs and automotive with a capacity of 2 million and 1 million units per annum, respectively. The margins in this segment will be in higher double digits. We acquired 51% stake in Q-Tech India for manufacturing and supply of camera and fingerprint modules for smartphones, IoT, and automotive applications, and have started consolidating the financials from 26 September , 2025.
In the next six to nine months, investments will be made to expand the capacities and deepen the level of manufacturing. We feel confident that the volume of the smartphone camera modules can increase from 40 million units and revenues of INR 2,000 crore in large financial years to 190 million - 200 million units per annum with the revenue closer to INR 6,000 crore - INR 7,000 crore and sub 10% EBITDA margins in the next two to three years. In line with our backward integration strategy for automotive components like display, we will also increasingly focus on automotive camera modules under this company. We have filed a component ECMS application for display modules, camera module enclosures, lithium-ion batteries, optical transfer, transducers, SFPs, and also mechanical enclosures with an investment commitment of approximately INR 3,000 crore over the next three years.
This is going to be the next phase of growth, which will also lead to margin expansion in our business. As we look ahead, we remain optimistic about medium to long-term prospects for the Indian electronics manufacturing ecosystem. 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 business was INR 13,361 crore, with a growth of 41% year on year, and operating profit of INR 472 crore, a growth of 53%. Out of this, revenue for telecom, IT hardware, hearables, and wearables was INR 1,635 crore, INR 331 crore, and INR 207 crore, respectively. We witnessed a strong momentum in the quarter with healthy volume growth across the various smartphone brands. Dixon remains the largest domestic manufacturer of mobile phones with high volume capabilities and best-in-class infrastructure.
We have received the PN3 approval for 74:26 joint venture with Longcheer and have finalized a new 4.5 lakh sq ft facility for the JV, which is expected to be operational by April 2026. The PN3 appraisal process for 51:49 JV with Vivo and 74:26 JV with HKC is progressing well, and we expect the approval in the coming weeks. Construction of a 1 million sq ft mobile manufacturing campus in Noida is on track for our anchor customer with much larger capacity, and the same is expected to be completed by March 2026. We are in active discussion with another large ODM of smartphones, and the manufacturing for them should start by Q4 of 2025-2026. Consumer electronics, that's LED TVs and refrigerators, the revenue for the quarter was INR 956 crores with an operating profit of INR 39 crores.
Out of this, the revenue of refrigerator business was INR 145 crores. We saw a significant postponement of purchases across the trade and consumer channels for this product category. LED TVs, in this quarter, we have increased our ODM share up to 60% of the volumes and continue to acquire new customers. We are offering authorized Google TV solutions along with Tizen OS, Fire TV OS, webOS, and Linux-based solutions to our customers, offering a complete basket of technological options and introduce unique features like karaoke and Sara TV. We have set up a state-of-the-art CKD robotic LCM line for large-size IFB televisions and signages. We're actively working on increasing capacities and enhancing capabilities for manufacturing for industrial, institutional, and automotive displays.
Refrigerators, another reason to substitute growth in the quarter, is the introduction of new and more stringent energy efficiency norms in India, leading to postponement of purchases in the run-up to enforcement deadline. In addition to the large capacity in the direct cool category, we have also now started new products in the cooling divisions like minibars in 50 liters and 100 liters category and getting very encouraging response. We'll also be foraying into deep freezers and visi coolers along with two-door side-by-side refrigerators. Home appliances, the revenue for the quarter was INR 429 crores. Operating profit was INR 50 crores with an operating margin of 11.7%. Our construction for capacity expansion for FAT and enthalpy is ready for commencement of production by end of Q3 and are in the process of ordering additional production line.
Launch of SAW, that is semi-automatic washing machine in 16 kg and 18 kg capacity, which would be the first across the industry and expected to be launched by December 2025. Production of robot vacuum cleaners for Eureka Forbes is to start by December 2025. We have found a very senior expert to drive the project for front-loading washing machines and foraying into various other home appliances. We're undertaking various initiatives to bring in more automation operations and strengthening the industrial engineering team for enhanced efficiency, productivity, and cost optimization. Lighting, operations in Titanium Technologies, that is a 50:50 JV between Dixon and Signify, started in August 2025. The order book looks robust with new categories of premium indoor and professional lighting products, and we're working to realize all the potential synergy in the business in the upcoming quarters with a new partner.
We've executed the first pilot order from one of the top retail chains in the U.S. in October first week and aim to scale up this opportunity to sizable business in the coming quarters. Another pilot order from the biggest retail chain in Germany is expected to fructify this quarter. We continue to focus and invest in this automation to further boost operational excellence. Telecom and networking products with this segment witnessed a strong growth with revenues of INR 1,635 crores as against INR 661 crores in the same period last year, growth of 148%. Home broadband penetration in India continues to grow at a very fast pace, and we've been continuously building up more capacity. We also have a stable order book for our anchor customer on CP devices, which will continue to be a major portion of business.
We're entering a new phase in our telecom manufacturing journey and have secured a significant order from a large leading U.S. telecom customer to manufacture telecom backhaul microwave radios, an integral part of RAN, that's a radio access network. These are highly complex, advanced network equipment, and production will cater not only to the Indian market but also the global demand from Q4 of this fiscal, and we expect a significant contribution to our revenues from this category. We've already started localizing components like mechanicals, plastic moldings, power supplies. The telecom segments present a robust and long-term growth trajectory and can potentially be the second largest driver for growth after a mobile business. Laptops, tablets, and IT hardware products, the segment saw healthy uptick in revenues of INR 331 crores against INR 57 crores in the same period last year, which is a growth of 481%.
Our dedicated IT hardware production and manufacturing unit in Chennai has successfully stabilized mass production of laptops and AIOs for HP and ASUS. Order book in this business looks strong for the upcoming quarters, and we are further expanding our capacity. We have successfully shipped data from a Noida facility to a Chennai facility and started mass production from this quarter. We finalized our manufacturing location for a 60/40 joint venture with Inventec Corporation of Taiwan. It is one of the world's top five IT products ODM for manufacturing of notebook PC products, servers, desktop PC, including its components like SSDs, memories, and mechanicals in India, and is expected to be operational by Q1 of next fiscal, which will have a positive impact on the margins. The backward integration play, along with capitalizing on ECMS and IT hardware PLS scheme, will lead to significant margin expansions.
Wearables and hearables, revenue for this segment was INR 207 crore for the quarter with healthy operating margins and very good ROCE. We have a strong order book in this business. Rexxam Dixon Electronics, revenue for the quarter for the JV with Rexxam was INR 79 crore and business at a relatively peak quarter, primarily due to subdued demand in the AC market. A new facility in Chennai will be operational by Q4 of this fiscal. I would like to stop here, and me and Saurabh are there to address your questions. Thank you.
Thank you, sir. We will now begin the Q&A session. Anyone who wishes to ask a question may press star and one on their touch-tone phone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use a headset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Aditya Bhartia from Investec. Please go ahead.
Hello. Hi, good evening, Mr. Lall, Saurabh.
Good evening.
My first question is on the ODM customer in the mobile phone side that you mentioned. It would help if you could share some more details, how large the customer is, what kind of volumes one can expect from that, or any other information that you can share around that.
We're in discussions with a large ODM for a smartphone, and we're expecting that this business should start by the end of Q4 of this fiscal or early Q1 of next fiscal. The expected volumes are in the range of around half a million per month. That's the volume we're looking at. As far as more granular level details of ODM, it's not prudent at this time to share.
Sure. You mentioned about the telecom business possibly becoming the second largest growth avenue for the company behind mobile phones. What kind of growth should we anticipate over there, and how big could the export opportunity be on the telecom side?
If you look at the numbers, we grew from INR 700 crore to, and this year we're going to be almost at INR 4,800 crore. Till now, largely, we are on the CP products and the consumer-provided end products, which comprises mainly Wi-Fi routers, which comprises fixed wireless accessing equipment, which is the largest growth area, and set-top boxes, which is IPTV and hybrid set-top boxes. Now, we have acquired the scale, we have acquired the operational efficiency, and we have a large partnership with large principals globally. What we wanted to and what we aspired for in this business was to get into the network equipment side, which is a much more complex business, much more complex execution. We have been able to secure an order with a U.S.-based company, which is into radios.
The pilot is going to be done by December, and the commercial production should start by March. By Q2 or Q3 of next fiscal, the exports are going to start. Initially, this business, I feel, is going to be around $151 million. That's the new category. On an overall basis, we feel that in a couple of years, this business should be somewhere around close to a billion dollars. Does that satisfy you, Aditya?
Sir, the line for Mr. Aditya has disconnected. We'll move ahead with the next question. The next question is from Sumit Sinha from Macquarie . Please go ahead.
Yes. Thank you very much. If you can talk about this ODM, can you give us more color around it? Did it emerge from, you know, maybe the Longcheer relationship, whether it's closed or not, but you definitely get the benefit of that? Is that something that you brought over from outside of the country? Is it domestic? My second question is the interesting what you said about the telecom business and you're getting into more complex sort of products. Can you talk about your aspirations for kind of the enterprise products versus the consumer products that you're generally known for? Thank you.
Responding to the first part of the question, this is a large global ODM. To start with, this is going to be an India-focused relationship. This is going to be an additional volume than what we are presently doing for the India market for a large brand in India. Our relationship with Longcheer is on a separate axis, which in any case is a robust relationship. With the JV approval, it's going to reach a different level. On the telecom side, we have been working towards raising our capability level beyond the CP product. This breakthrough for us with the U.S. partner is a very significant breakthrough. The capability, the talent acquisition, the line setup, the test setup, the NPI systems, the digitization is all in the works. We are targeting the pilots to happen by December and the commercial production to happen in Q4 of the current fiscal.
We feel, and we have been assured by our partner, that India and Dixon will be the footprint for servicing a part of the global markets in this category. That's where we are.
Can you just talk about your aspirations for other sort of enterprise products going beyond? Obviously, this is a great deal for you. Where else could you head outside of CPE?
It is definitely an aspiration for us, and I've been talking about it in an earlier earning point. We have brought in a senior resource at Vice President level to start strategizing and rolling out our non-CP category business. We'll definitely be working on it, but it's slightly premature to share with you the granular level details of it. As far as the ambition and aspiration is concerned, it's a focus area for us for which a resource has already been hired.
Got it. Thank you very much.
Thank you. The next question is from the line of Siddhartha Bera from Nomura. Please go ahead.
Thanks for the opportunity. Sir, the first question is on the mobile side. Now, with another new customer and a good order book, possibly to share some targets for this year and next year. I mean, we had expected 43 - 44 this year. Does that remain on track and do we see a scope to revise that and for next year as well?
We feel that this year numbers are going to be similar, 40 million, 42 million. That's what we have been talking about. We feel that we are moving in the positive direction of our partnership with Vivo. There's going to be a major push-up to the numbers. Next year, we feel that we should be somewhere between 55 million - 60 million.
Understood. That is including Vivo, you expect 55 million - 60 million?
That's right.
Okay. Have we thought of slightly, because I think last time we discussed, we had targeted between 60 - 65. Have we thought of slightly cautious in terms of ramp-up? Are we seeing any impact from the exports markets as well in terms of demand?
No, I'm not seeing any cut or anything. What I'm just putting across to you is a particular range. One still maintains somewhere between 60, 65, something like that. Yeah.
Understood. On this new segment of front-load refrigerants as well, if you can share some insights about how will be the capacities and ramp-up you are looking at this?
Sorry, I didn't get your question.
On the front-load refrigerator washing machine as well, if you can share some color about the ramp-up.
Front-load is still in the conceptualization stage. A very senior resource and expert has been hired, and the project plan is being put together. The product categories and product portfolio is being designed. Initially, we feel the capacity is going to be somewhere between 150,000 - 200,000. It's going to be an extension of the Pathirupati plant.
Got it, sir. Thanks a lot. I'll come back and look at it.
Thank you.
Thank you. The next question is from the line of Vipraw Srivastava from Philip Capital. Please go ahead.
Hi, sir. Good afternoon. Sir, quickly on the mobile phone volume side, what's your outlook for quarter three and quarter four given the facility is now over?
It is still in works. At this stage, to share the numbers would be slightly difficult overall.
We just shared the numbers in the last, we just shared the numbers.
Overall, we are sharing with you it's going to be 42 million in this particular fiscal. We're already in around 20 million till now.
Right, sir. Sure, sure. At the beginning of the year, the firm had given a guidance of 40%-45% revenue growth. Does the firm maintain this guidance in this quarter? First of all, we never gave any guidance.
We don't give any guidance.
Okay. No worries, sir. Last question from my end. Given that Ice Marble has done very well for the firm, what kind of ramp-up do you expect from Ice Marble? You are expecting exports to Africa and other markets. Is that still on track?
We are working on exports. The exports have already been initiated. We feel that there is an extremely potential area, which our partners in Ice Marble are absolutely open and committed to. The plans are being made. We'll have to expand our capacities. We're going to set up a new footprint for that. We have to do some value engineering for enhancing the value chains and deepening the manufacturing. All that exercise is done. We are very confident that in a couple of years, there's going to be a very large segment for us servicing the export markets and the Transsion brand for the world.
Okay, sir. Thanks a lot.
Thank you.
Thank you. We now have the next question from the line of Sonali Salgaonkar from Jefferies. Please go ahead.
Sir, thank you for the opportunity. Sir, my first question is on the other non-operating income. There is a very sharp increase this quarter as compared to last quarter or even the last annualized year. I want to understand what exactly is causing this jump and is there any runoff?
Yeah. Hi, Sonali. Sonali, basically, we have done a mark-to-market income of a 6.5% stake in Aditya Input Tech, which is now a listed company. The market cap as of 31st December, as in 30th September, into 6.5% stake is what we have valued that. We have initially valued at a particular value, but now the value is established. It was a listed company. For the last one year, we have been booking that mark-to-market. Now a large part of that mark-to-market has come up in September 2, and we have to continuously now, depending on how the market cap of that company behaves, do it every quarter.
Essentially, if I understand, this is a runoff only for this quarter. This big an amount may not sustain in the next few quarters. Is that right?
That's why we have reported the adjusted numbers as well as reported numbers. The numbers shared in the opening remarks were all the adjusted numbers without any impact of this one-time gain.
Understood. Got it. My second question is on the CapEx. The CapEx guidance, do you stick to that, the one that we had put out in the earlier quarter?
Yeah. Sonali, we have done a CapEx of INR 550 crore in the first six months. Broadly, that should be the growing trend rate for the next six months as well.
Understood. Thank you so much. All the best and happy Diwali to both of you. Thank you.
Same to you and your family.
Thank you. The next question is from the line of Dhruv Jain from Ambit Capital. Please go ahead.
Thank you for the opportunity, sir. My first question is on the Longcheer JV. If you could just provide an outlook with respect to what kind of volumes are you expecting through this JV, and is it included in the 55 million - 60 million volume guidance that you spoke about earlier?
We feel, Dhruv, that the JV should become operational by the first quarter of next fiscal. We feel that the volumes in this JV for the next fiscal should be somewhere around 8 million - 10 million. This is going to be a part of 60 million - 65 million that we're talking about for next fiscal.
Okay. Sir, the second question is on the PLI. If you could just spell out what was the PLI contribution in your EBITDA in this quarter. We note that there is a large INR 1,400 crore receivable from government on PLI. I just want your update on that because we've seen the annual report that the last received PLI was on 31st December 2023. Thanks.
Yeah. Just to update you, Dhruv, one of the PLIs, we have received our claim as far as the mobile business is concerned till September 2024. From October 2024 till June 2025, it's presently getting appraised, and it's almost in the last stages of appraisal. Telecom PLI for last financial year 2024-2025 we have received. Once we achieve the thresholds of CapEx for this year, we will file a claim, but that will most likely happen next year only for 2025-2026. Also, our PLI for telecom and lighting business and our AC inverter controller board for last financial year should come in the next few weeks, next couple of weeks. It's in the last stages. This is the status. Yes, the numbers would be similar. My sense, broadly, what you had mentioned, INR 1,400, INR 1,500 crores is a receivable.
There is a corresponding repayable to that effect as well, and the difference is our share of income as well. In this quarter two, we have booked an income across all these four PLIs which I mentioned because IT PLI will only happen for next financial year. These four PLIs put together, we have an income which has been booked up closer to INR 150-odd crores.
This is for the first half of the year?
No. First half is closer to INR 90 crore.
Got it. Thank you so much, and happy Diwali to everyone.
All the four PLIs.
Thank you. The next question is from the line of Indrajit Agarwal, CLSA. Please go ahead.
Hi. Thank you for the opportunity. I have a follow-up on the mobile volumes. After doing 40 million - 42 million units this year, we have additional, let's say, 8 million - 10 million from the Longcheer JV. Plus, we have the entire Vivo volume next year. Shouldn't it be a much higher number than, let's say, the 55 million, 60 million units that you're guiding for next year?
Longcheer is also the existing volume that we are doing with Longcheer. That is going to be shifted to the JV. There will be some incremental number to that. The additional number that we are aspiring for in the next fiscal is one of the Bevo, and the second is the new ODM partnership that we are pursuing. These numbers are not static numbers. These are aspirational numbers. We feel that we are being conservative in sharing these numbers. The upside can be much more on that.
Taking a slightly medium-term view, at 60-odd million units, you would be probably 55%, 60% of the outsourced smartphone market in India. Post that, where would our volume growth come from? Do you think we can gain market share even beyond that, or would it be more on exports and market growth-driven?
In mobiles, we feel that there is still some room, not very large, but some room for growth by getting a larger share of wallet of existing customers and also a couple of new acquisitions. What we are pursuing is our export opportunity with Transsion and iSmartu . We feel that can be a significant additional volume. In any case, in mobile space, the huge focus is now going to be on execution of our display project because it's margin-aggressive, and it gives us the moat and tenacity in business, and also our camera module project. That is the mobile ecosystem that we're working upon. That's 65, 70, 75 million numbers, and display, camera module in-house, and a significant portion beyond the 65, 70 million goes in for exports. That's the path we are pursuing. Let's see where we reach.
Sure. That's all from my side. Thank you.
Thank you.
Thank you. The next question is from the line of Aachil from Nuvama IAE. Please go ahead.
Good evening, sir. Thank you for the opportunity. Sir, just on the PLI thing, if you could highlight, just clarify the number what you gave, INR 150 crore for 2Q and INR 290 crore for one-off. Is that the gross or is that the net R share?
Yeah, that is broadly our number only, sir, is our share.
That is our share. Okay. Secondly, sir, there have been some media murmurs about the extension of the PLI for mobile. If you have any comment to make, do we see there is a possibility and by when can we have some more clarity on the same?
There are some discussions which have started between the government and the stakeholders for giving additional support to the mobile sector. However, it's at a very preliminary stage. What you're saying is right. The discussions have been initiated.
Understood. Just a clarification, given, let's say theoretically, if it was to expire on 31st March 2026, do you see any margin pressure for any of the quarters of FY 2027 before we see the integration benefits actually kicking in?
There can be some pressure for a couple of quarters by the time the display and camera. Camera module has already started happening because that's a running plant, and display, the plant is going to become operational only by March, April. There can be some pressure for a couple of quarters in 2027.
Got it. Just last question, if I may, with respect to data center opportunity, is there anything we can cater to in existing portfolio or in future, if you could kind of comment on the same?
We feel, although it's at a very initial stage, that our relationship with Inventec is going to be leveraged for that.
What kind of BOM can we cater to out of the entire data center CapEx?
We're basically talking about the servers.
Right. I was just trying to understand the quantum. Could that be 20%? Could that be 10%? Any approximation?
No, that would be difficult to put a number to this at this stage.
Got it.
That is part of our discussions and agreement with them.
Got it. Got it. Great, sir. I'll call back in the queue for follow-up. Thank you so much.
Thank you.
Thank you. The next question is from the line of Madhav from Fidelity. Please go ahead.
Hi. Just wanted to check the 8 million - 10 million volumes for Longcheer JV, which we are speaking about. I mean, just want to clarify that currently, it was in a 100% mix-renewal entity, which will now shift to a JV. The profit that we made on that particular volume is now going to be lower once it shifts to the JV. Is that the right way to think about it?
It is a 74:26 JV. That's the way it's going to split. With the JV, we also bring in much more operational efficiency because the complete talent pool is going to be available to us for enhancing our efficiency. Yeah, the margins are going to be shared.
We feel, yes, whether there can be possibility of additional volumes so that business plan is getting burned out. Yes, there is a possibility of getting additional volumes as compared to what we are doing right now for them. This is a volume that we already do. It's not a new volume that we get with the Longcheer JV. Just wanted to clarify that.
We are being conservative. We feel that these volumes are going to go up. Let's see because they're working on some other large contracts. On an overall basis, we feel that it's going to be a trigger for growth for us. As of now, if I take it, it's a transfer of the LC volumes from Budget Dixon to JV.
Okay. Got it. Got it. Just on the IT hardware, could you give us a sense in terms of the ramp-up for the next one or two years, how that ramps up?
This year, we are targeting revenues of almost INR 1,200 to 1,300 crore in this business. We've already started commercial production for HP, for ASUS, for Lenovo. The production is already happening in our Noida plant. Also, now, Acer production has shifted. The ramp-up is taking place as well. Also, our JV, which is in the same product categories with Inventec, is going to get implemented and commercial production is to start by Q2, Q3, Q2 of next fiscal. We feel that the IT business for us in the next two years should be around INR 4,000 to 5,000 crore business.
Got it. Got it. Sure. Thank you.
Thank you. The next question is from the line of Pankaj Tibrewal from Ikigai Asset Management. Please go ahead.
Yeah. Good evening, Atul Lall, and good evening, Saurabh.
Hi, Pankaj. How are you? Happy Diwali.
Happy Diwali, Atul. Same to you. Just taking off from a next few years' perspective, the way mobile became a big growth driver for us, and it's now roughly 75%, 80% of our revenue. If you take a crystal ball, I think over the next three to five years, which are the other segments which can be a big growth driver as you move ahead? I'm not holding on to this. Just trying to understand, can exports of lighting, can export of mobile, IT hardware, battery energy storage—we saw a JV with you, which you have formed—which are the other big segments which can drive growth for us as you look forward in the next three, four years?
Pankaji, as they've been sharing with you, the way we look at our business is that we look at a large opportunity pool. Once we have the large opportunity pool, we take a plunge into it if it is aligning with our technical capabilities and if the balance sheet part is okay. What has worked pretty well for us till now is this kind of pouring. Definitely, the trigger of our growth in the last two, three years has been mobile. In mobile, we already feel we're going to be at 65% - 70% of the Indian addressable market. Now, we want to leverage our relationship with Transsion, which is already the fourth largest brand globally, for getting into global markets.
What we are aspiring to do, as far as the cost structures are concerned, is that without the PLI benefit of the Government of India, we are as competitive as any other country. Once we are able to do it, we feel that the global opportunities are going to open up. The next thing which we feel is going to be extremely important, and we're extremely focused on, is our foray into the component side. Now, the component side, as of now, the unit economics looks extremely good. We feel that we can generate a much higher operating margin. Also, a positive part of this business is that in spite of having a lower asset to turnover ratio, the ROCs in this business are also going to be high. My balance sheet is just not getting disturbed. Component focus is going to be an important area.
Component focus is not only going to be for our captive consumption for mobiles and IT hardware. It is also going to lead us into automotive. We feel that that's going to be an important chunk because our JV partners there are already major players in the automotive sector globally, and they're, in fact, already supplying to the Indian automotive players. That is one area. The second area which I'm talking about is our JV with Airtel, which is our telecom product. The telecom product growth has already seen a very high growth. Now, we are fortunate, we are lucky, we are blessed that we've had this breakthrough into the non-CP radio network category, which is a large category. Obviously, we have to acquire a lot of capabilities in that and require a different set of capabilities in execution.
If we are able to do it, then that's largely for the global market. That can be a large play. Of course, we are excited about a JV with Signify for lighting. That takes us into a more premium category and hopefully opens up for us the global market, just like they have done with their partnership in China. These are all triggers of growth. Similarly, the IT products, which we feel that in the next two, three years, it can be an INR 5,000 crore business. Again, that will be integrated in-house display, in-house mechanicals, in-house SSD modules, in-house memory modules, and also the power supply units. These are all triggers of growth, Pankaji.
When I look at the IT hardware, notebooks, laptops, globally, it's about a $182 billion, $200 billion TAM. A few of the Chinese players we were seeing, they are about $30 billion, $40 billion individual companies. Do you think at some point the way mobile became so large, India became an export destination in various companies? Can IT laptops, notebooks, others also be a potential large TAM which Indian companies like us can cater to?
I think the Indian market for IT products is approximately $12 billion - $13 billion. In IT products, India is a signatory to ITA 1, so the government is not able to create a duty arbitrage for promoting domestic manufacturing. In the policy framework, what they've rolled out is the PLI, IT PLI. I'll be very candid, at present, when I see the disability that when we're importing at 0% duty product, but what is made in India, there is a 4% - 5% disability. That 4% - 5% disability in Dixon, we're trying to cover up through our component play, that is namely display, mechanicals, power supply, SSD. Once we're able to do it in the next seven to eight months, we feel that our cost structure is going to be as good as China, and then this whole market opens up.
When I'm talking about $10 billion - $12 billion of addressable market, the production value is around $7 billion - $8 billion. If one is able to cater to that, then I think for Dixon, it can be $1.5 billion - $2 billion business, domestic market. It's a journey. Please appreciate that mobile also, it has taken four to five years for India to become a hub for mobile phones exports. I feel with slightly longer term, four to five years, India can become the hub for exports of IT products also. Definitely, it can. In any case, a normal laptop is getting commoditized, and it cannot be produced in Taiwan. At some point, possibly even China is going to exit. It's going to be almost a similar journey and trajectory which we have seen in mobile here.
Wow. That's fantastic. Last, you know, when you guys raised capital in 2017, I clearly remembered our revenue used to be INR 2,400 crores. You have almost multiplied 20x from the time you raised capital, and after that, you haven't raised any capital. This has been an amazing journey. When you expand yourself for the next five, seven years, do you think this capital discipline which you have kind of displayed till now, the same capital base and the cash flows can take us for the next leg of growth also? Do you think that external capital will be required for the next level of growth as you move ahead?
Pankaji, we are committed to the same trajectory. That's what our DNA is, and that's what we are going to pursue. We feel as per the plans, the tangible plans that we have in front of us, and we have adequate internal cash flows to support it. As of now, we're not looking at it. However, if some large opportunity comes, right, and we feel that it's a fit for our growth, then we might look at it. As of now, we have adequate cash flows to support the growth that we are sharing with the street.
No, I think the company is a classic example of what disciplined capital allocation can do. 20x with revenues with zero external capital pre-IPO is amazing.
Thank you. Thank you so much. Thank you.
Congratulations to the entire team. Wish you all the best and happy Diwali.
Happy Diwali. Happy Diwali.
Thank you. The next question is from the line of Onkar from Shree Investments. Please go ahead.
Yeah. Continuing with the earlier participant's question, just wanted to know whatever you just shared. I mean, whatever the expansion could be in terms of the new categories which you mentioned. I mean, what kind of growth rate can you target? Because now the base has become so large. Even the high-growing category, which is mobile, now you are virtually more than 60% of that category. Like how can we model Dixon from here on?
As we shared with you, the focus is to take, we feel there is still some room for growth within mobile. We feel that our backward integration category is going to be extremely important for us, for deepening our moat in this business, for taking our new businesses of telecom and IT products, and replicating what we have been able to do in mobile in these categories. Also, our traditional categories, we feel there's a room of growth. In lighting, our JV with Signify, in refrigerators, we have expanded the capacity from 1.2 to 1.7. In the next phase, we are taking it to 2.5. Expansion of the portfolio from DC, 190, 210 liters to 50 liters, 100 liters, to new models, to deep freezers, to wind coolers, to, yeah, side-by-side. Expansion of our appliances category, there's a washing machine into a new category of front loaders.
Also, we are exploring the possibility of getting into dishwashers and microwaves. These are all expansion things. As far as the numbers are concerned, it will be very difficult to put it into a number form as of now. If you want a better insight, you can have a separate one-to-one with Saurabh. He'll give you a better insight on this.
All these categories which you mentioned in the context of overall revenues which you are currently having or which you will be having in a year or two are so small that even if they grow very fast, there won't be any large impact on the overall revenue front.
We continue to grow in mobiles. We continue to grow telecom. We mentioned the opportunities that are there for the non-CP products. The CP market also continues to grow with the racket customer. We mentioned about refrigerators. The larger revenue growth opportunities will be mobiles, IT hardware, telecom. The other businesses will also be growing at a decent pace. A combination of all put together, I think it should be a very strong growth for the next couple of years. At least we have that kind of visibility here.
I mean, you haven't given any formal guidance, but to an interview to CNBC, you had mentioned that you will be targeting around INR 1 lakh crore of sales in the next three to four years. I mean, is it possible to do that?
We feel confident about it.
Yeah, we feel confident about it. You can say.
Okay.
The integration which you mentioned, with that INR 1 lakh crore of sales, what kind of margins can we see till that level of sales is achieved?
Yeah. With more backward integration, operating leverage, and some bit of ODM business largely in lighting, refrigerator, my sense is it should be very difficult to say, but the range can be somewhere around 4%, 4.5%.
From current around 3.7%, 3.8% to 4.5%, you are expecting?
I said I gave a range to you, 4%, 4.5%.
Yeah, 70, 80 bps up.
Yeah, 70, 80 bps.
Okay. All right. Thank you very much.
Thank you.
Thank you. The next question is from the line of Rahul Agarwal from Ikigai Assets. Please go ahead.
Yeah. Hi. Good evening. Thank you for the opportunity. Just a couple of questions. Firstly, on the promoter holding, I see, you know, when I look at the last, you know, almost 12 quarters now, every quarter we've seen some bit of selling by the promoter family. Maybe there are legitimate reasons for it, but just wanted to know, you know, the stake is now down to 29%. Almost 5% of the company has been sold over the last three years. Is the intent of the family now done with in terms of, you know, whatever personal needs they have, or could we see more liquidation?
If you see the combined shareholding of promoter and the family and myself, it is more than 42%. Second, we don't see any more dilutions happening at that segment.
Okay. Got it. Secondly, you haven't spoken about the battery energy storage systems. Your thoughts, Atul Lall, will really help on battery, please.
We are looking at a lithium-ion battery product, mainly focused on mobiles because we have a large captive. We are in advanced stages of discussions with our technology partner. The project plans are getting fortified. That's the stage we are. We've already submitted our application for ECMS. That's where we are. Yeah.
In terms of scale and size, could you comment, please? How much could that be?
In this case, the lead will be taken by our JV company, Longcheer, which is a Transsion brand company. They'll be taking the lead on this project.
Okay. Perfect. Got it. Thank you so much for answering my questions, and happy Diwali to both of you. Thank you.
Happy Diwali.
Happy Diwali.
Thank you. The next question is from the line of Vaishnavi Gurung from Craving Alpha Wealth Fund. Please go ahead.
Great day, sir. Thank you for taking my question. My first question is a follow-up question. As you mentioned that you're expanding to different segments like laptop, telecom. If you can put a number to this, what can we expect a diversification in terms of revenue by FY 2030?
That's slightly early. Please be rest assured these are both going to be high-growth verticals for us. It's going to be growing many-fold, but putting a number to it at this stage is premature.
Okay. Okay, sir. My second question is having Vivo as our client. Considering VIvo's market share in India is the highest currently, do you see the shift from our top three clients will shift? Like one of them will be VIvo.
Yeah, yeah.
Go ahead.
Yeah, it's going to be a large customer. You're absolutely right.
You're absolutely right. They're doing very well, and they have the largest market share today in the Indian market.
Right. Do you think VIvo will replace our anchor client, Motorola, in this case?
We aspire that both of them become our anchor customers. Yeah, but VIvo is going to be a large, large customer for us when there's those two.
By any chance, you can share the % of revenue by our anchor clients currently?
We generally don't, yeah, we don't share.
You see, that's confidential
that's confidential information, and we don't share that.
Okay, sir. My last question is in terms of revenue growth for this quarter. If we see the last three or four quarters, we have averaged out to a growth of 100% year on year. This time, I think it was approximately 28%. Hello?
Yes, you're absolutely right.
Yeah, sir, if you can put some light on that.
We appreciate on a large base. We can't grow on 100%. The base has become fairly large, but the growth is going to be aggressive. Please be rest assured on that.
Okay. That's it from my side. Thank you, sir.
Thank you.
Thank you. The next question is from the line of Madhav from Fidelity. Please go ahead.
Our questions we've answered, sir. Thank you.
Okay. The next question is from the line of Sumit Sinha from Macquarie. Please go ahead.
Yes. Thank you for taking my question again. I guess I just wanted to understand, I mean, the domestic opportunity is what you discussed that many people have mentioned and you're kind of reaching the limits of the domestic smartphone opportunity. You have emphasized taking share from other parts of the world and bringing in and bringing that manufacturing. Where can you give us more insight into where that growth could come from, as in where the volumes come here to be manufactured? Of course, talk about where could they be exported to. I mean, we know about Africa, but what other parts of the world are open to the sort of volumes that you can generate?
The global market in our Transsion partnership is going to be mainly Africa and possibly Latin America. Our other anchor customer relationship is exports to the U.S.
Where could the increment be as you capture more volume from the rest of the world? Where could that come from? Is that China? Which parts of the world?
You're talking about shifting, is it?
Yes, yes, shifting.
I don't want to name any country, but our exports are going to be mainly focused in our partnership to Africa and Latin America with one relationship and within our relationship to the U.S.
Got it. Thank you.
Thank you. The next question is from the line of Bhavik Mehta from JPMorgan. Please go ahead.
Hi. Thank you. A couple of questions. Firstly, on the HKC JV, I understand it will be largely for captive consumption, but in terms of EBITDA flip, what kind of levels we can target in 2027 and 2028?
There's a margin we feel that is going to be in mid to high teens. Finally, we feel that this can be once we reach peak levels, which is almost 60-odd million of mobile phones. Within 60-odd million, it's going to generate a revenue for us of almost $600 million. We are talking about 2, 2.5 million of laptop display, which is going to be another $100 million. We are talking about the TV display, which is going to be almost 1.2 million - 1.5 million, which is going to be another $60 million. The automotive display is going to be around 20 million units.
Overall, we're talking about $800 million - $900 million of business. That's what we are aspiring for in the next two to three years.
Okay. That's helpful. The second question is on Q-Tech India for this year, FY 2026. What kind of revenues and EBITDA can we assume? It was INR 2,000 crore last year. This year, are you ramping up the capacity, which can drive some incremental revenues as well?
Yeah. The capacities will take some more time. We have put some money in the company. That will happen over a period of time, and also the deepening of the level of manufacturing there. The first six months' numbers, definitely, there is an uptake of those numbers as compared to the same period last year. This INR 2,000 crores should grow, but very difficult to put a number. My sense is it should be a double-digit kind of growth this year and on an annual basis. As we continue to deepen, as we expand more capacities because the landbank is there, we just need to expand those capacities. We broadly gave you guidance that this 40 million units and the kind of order book that we have on mobile phones, we can take it to 190, 200 million in the next two and a half, three years.
Every year, that number of 40 million will continue to grow with more backorder, more deepening of manufacturing.
Okay. Got it. Thank you.
Thank you. As there are no further questions, we would now like to hand over the conference to management for the closing remarks.
Thank you very much for being on the call with us and sharing your insights and giving us the suggestions. We wish you all a very, very happy Diwali. All the best. Thanks very much.
Thank you, everybody. Happy Diwali to both of you.
Thank you so much.
On behalf of Dam Capital Advisors, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.