Ladies and gentlemen, good day, and welcome to the Dixon Technologies Q3 FY 2026 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 FY 2026 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'll 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 INR 10,678 crores, against INR 10,461 crores in the same period last year. Consolidated operating EBITDA for the quarter was INR 421 crores, against INR 398 crores in the same period last year. Consolidated operating PAT for the quarter was INR 214 crores, against INR 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 relationship with customer, 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 material, especially for the lower price 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 INR 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 we 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 INR 9,750 crores, and operating profit of INR 1,050 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 the smartphone shipments comes amid the smartphone brands' struggle with an unfolding super cycle 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 4,000 sq ft facility for 74:26 Longcheer JV for manufacturing of smartphones and other electronic devices is expected to start operations by Q2 of 2026-2027. Construction of a 1 million sq ft 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 smartphone, and target to expand volumes of smartphone camera modules from 40 million units in this fiscal to 190-200 million units per annum. We remain confident of getting the PN3 approval for our Vivo JV soon.
Consumer electronics, LED TVs, and refrigerators. Revenue for the quarter was INR 567 crores, with an operating profit of INR 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 strengthened meaningfully and remain optimistic for recovery in volumes for Q1 of next fiscal as general inventories normalize. Our strategy is to increase market share in large screen TVs, smart and connected models, and platform, 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.
We are the first one to introduce features such as inbuilt 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 January ahead of the summer season. The softness was further restrained 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 1-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 in 50 liters and 100 liters categories, which have received an extremely encouraging market response, with the entire available capacity already booked. We are also onboarding leading brands, including higher end segment.
We introduced a new 170-liter low-cost refrigerator model 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 sq ft 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 INR 355 crore. Operating profit was INR 41 crore, 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 with 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 will start in March 2026, which will be the first across the industry. Our new facility for front-loading washing machine is ready, and mass production to start with Q2 financial year 2026-27, with annual capacity of 300,000 units. Production started for robotic vacuum cleaners with 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 investment 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, batten, downlighters through this partnership, and positioning us firmly at the center of ongoing consolidation within the Indian lighting industry. We are seeing several small and subscale players in the lighting ecosystem struggle to keep pace with the required investment in technology, quality, and compliance, which is creating a favorable competitive backdrop for a well-capitalized, integrated platform like us. 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, U.K., UAE, and U.S.. 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. CPE 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 U.S. telecom brand. We have localized components such as mechanicals, adapters, plastic moldings, and sheet metal. We have been selected as an ECS beneficiary for optical transceivers in line with focus on diversifying into technologically advanced product categories, and we'll 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 segments saw a healthy uptake 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 HPE and ASU.S.. 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 discussion with an existing customer for manufacturing of tablets. The new facility being developed adjacent to our existing facility, and there are 60/40 JV with Inventec is near completion, and mass production of SSD and memory modules is planned to begin in 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 the JV partner for manufacturing of servers to capitalize on the fast-growing market. Rexon Dixon Electronics, Rexon JV for AC PCBs, continues to perform well and remains a strategic asset in our component portfolio. We expect a robust demand for AC this season and would scale up our capacity by operationalizing a new upcoming Chennai facility by end of Q4 of the 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.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Ankur Sharma with HDFC Life. Please go ahead.
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, and more importantly, you know, how do you see volumes for both 2026 and into 2027 versus the earlier guidance that you gave out?
Yeah, so, Ankur, the smartphone volumes for Q3 was around 6.9 million.
Mm-hmm.
Yeah, overall, in nine months, we have done a volume of closer to INR 27 million.
Yeah. Okay. Mm-hmm.
Q4 volumes are expected to be somewhere between INR 7 million -INR 7.5 million.
Mm-hmm.
For 2026, 2027, 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 a government approval to Vivo.
Mm-hmm.
It's slightly premature to commit on a number for 2026, 2027.
Okay, 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, you know, we've been expecting this to come through.
Yeah, I appreciate it, Ankur, but we feel that we are fairly close to it.
Mm-hmm.
Yeah. And it should happen shortly. That's where we are.
Okay. Fair. Fair. Just on the margins, you know, one was you know 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 2027. So how do you see cell phone margins? You know, obviously, I expect some delays in the ramp-up of our component JVs. So 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. And a follow-up would be, you know, we're hearing about a second PLI also coming through for cell phones. If you could please talk about that? Thanks.
Yeah, so, Ankur, as we have been mentioning in our previous earnings calls also, the mobile mar-
Mm.
Mobile business margins are closer to 3.5%.
Mm-hmm.
Which has got a proper PLI as well, probably 0.5-0.6% of our share of PLI income, which is, which is, which is getting consolidated in these margins.
Mm-hmm.
So, to say that PLI will get renewed or not, with surety, it's very difficult to say right now.
So coming in there, Ankur, and other stakeholders here, there are deep discussions happening between the industry and the government.
Mm-hmm.
We are optimistic about it, but to say anything with certainty is not a fair-
Sure.
Is not a fair statement on my part. Are there discussions on? Yes, the discussion is on.
With the industry-
Is there a-
Yeah.
Is there a positive response? Yes, there is a positive response.
... Mm-hmm. But is it an absolute certain thing to come in? No.
Very difficult to say.
Yeah, so government played with industry, a lot of data has been shared.
Mm-hmm.
Government is evaluating it. One view is, of course, they want to give more support to the sector till the time the electronic component ecosystem gets created.
Mm-hmm.
It's very difficult to ensure the team. So assuming a case where it goes away, assuming the case-
Mm.
- Worst case, it doesn't get extended, then 0.5%-
Mm.
of margins will get impacted in our mobile business, which we have communicated earlier as well. But 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 2027, 2028. But 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. And also the display, the machineries have been ordered, and some of them will get ordered in the next few months. But and the trials, as communicated in the remarks, will happen somewhere in Q1. Mass production should start towards the 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 will take 2-3 months for installation, and we feel that sometime by June-July, the trials and the commercial production should start. Hello, are you there?
Yes, sir, the current participant has disconnected.
Okay. So we can go to the next.
Yeah. The next question is from the line of Samit Sinha with Macquarie Capital. Please go ahead. Samit, your line has been unmuted. Please go ahead with your question. Mr. Samit, your line has been unmuted. Please go ahead with your question. As there's no response, we'll go to the next-
Hello, sorry. Can you hear me?
Yeah.
Okay.
Go ahead.
I'm sorry about that. Yeah. So, yeah, thank you. So a couple of questions. One is, Mr. Lall, I mean, obviously, memory price has been going up for the last two quarters. There are some news stories about display prices also kind of going up. So it seems like, other part, other components will also be impacted. How do you... In your opinion, how are the OEMs reacting to this? What's their, they're obviously, we'll probably see some, despeccing, where they'll, you know, instead of 16 GB of memory, they'll probably go down to 12, keep the pricing the same. Higher-end phones are probably more, price insensitive. So can you talk about that? Because I wanted to understand in that context, what is, you know, how about your economics? Are you, would that stay stable?
My second question is, you know, reading about some media reports about Motorola saying that they'll be using you for the camera module in their phones, so congratulations on that. Have other OEMs also signed up? And if yes, can you name them? And then I have a follow-up question.
So on the first part of your question, as far as the unit economics is concerned, for us it's a passthrough. For us, there is no impact as far as the value chain and impact on the margins is concerned, on an absolute basis.
Mm-hmm.
What happens is, that when the price increases, and it increases so significantly, everybody is expecting an impact on the demand side.
Sure.
That's a concern area. And as you very aptly captured, one feels that the demand of the mid segment and the lower segment is going to be impacted more. So that leads to an uncertainty element in the whole business, and that's where we are. However, you know that as far as the economics is concerned, for us, it's a passthrough. The second part of the question on the camera module, yes. So in Q Tech, we are already supplying to Motorola, and we have got an extremely positive response from them for expanding this relationship with Q Tech. In Q Tech, we are already supplying to various other brands. So we are supplying to Vivo, we are supplying to Samsung-
Okay.
We are supplying to OPPO, we're supplying to all the other brands.
So they are a big supplier, Samit. They are part of the supply chain for almost, for most of the brands in the Android ecosystem.
So in Android ecosystem, almost all the brands are our customers.
Got it. Okay.
The camera modules till now, which are being imported, we please appreciate the market of camera modules is approximately around INR 350 million-INR 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 first when the government puts out the budget. Hopefully, there's gonna be more incentives for localization. My final question is, and this is-
That in QTAG, we have also got the ECMS approval.
Right. So my final question is, I think, Mr. Lall and Saurabh, I mean, there's been multiple dynamics in the business, right? And I think all of us are trying to figure out what the, you know, 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 know, you obviously spoke about PLI headwind in case, PLI 2.2 doesn't happen. And, can you give us a 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 2027, 2028?
So we feel that we are close to the Vivo JV. Yeah, because we are pursuing very deeply with the authorities. But to give a specific timeline is not that easy.
Yeah. No, I understand that. I was trying to get at more from, you know, overall perspective, multiple drivers right now, smartphone, input costs going up, you know, PLI getting pushed out. What are the-- how could margins be going up and down, in the next year, next twelve months?
We still feel that we should be able to have a margin of somewhere between 2.8%-3.2% in our mobile phone business. That's how it's going to look like. By the time we start integrating a backward integration play, and then margins would keep on going-
Yeah.
Incrementally up month-on-month. The timeline for this, I feel, to start this operation of integration of components that we are doing, is going to be 6-8 months. And finally, we feel that almost 70%-80% of our business would be integrated in the component landscape by 2027-2028, which will lead to an overall expansion of margins. And here I'm talking about the scenario without PLI.
Got it. Okay. Thank you very much.
Thank you.
Thank you. The next question comes from the line of Vipraw Srivastava with PhillipCapital. Please go ahead.
Hi, sir. Good evening. Sir, quickly on the disclosure side, I mean, in previous quarters, used to the revenues from iSmartu routers and other segments, which we are not getting from this quarter. So any reason for that, why disclosure hasn't been given for this quarter?
There's no specific reason. This is a combined entity we look at, and Ismartu is also nothing but mobile phone business only. So we decided to consolidate and show as part of the mobile and business. In case you're looking for separate numbers, you can have a separate discussion with me, I'll give it to you.
Sure, sir. And 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 two 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 a conservative basis, somewhere around 60-65 million units. And that's a large play even for 27-28 for our component business. If we'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 40-50 million. I'm looking at almost 1.5-2 million of notebook displays. I'm looking at almost 2 million of automotive displays, both four-wheeler and two-wheeler. So for us, it's a large play. And for some of the brands, Vipraw, we are also working on some increased order book on export side. So those are deep discussions-
Okay.
-which are happening. We are not in a position to say right now.
Sure, sure, sure.
And so is our backward integration strategy. Yeah, there can be some quarters, and we clearly mentioned you that there can be five, six months for us to ramp up this both the component play, but we feel absolutely confident about 27, 28. So we are, we are not... 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.
Okay, sir. And sir, last question from my end. Given that, you know, we were taking in 20 million volumes coming from Vivo for FY 2027, we still don't have approval. I mean, are you sure, do you maintain this 20 million numbers for Vivo for FY 2027, or there can be a downside risk to this?
You see, we feel confident, but everything is subject to that, how soon we are able to get this approval. Because after that, it's going to take a month or couple of months for integration. Yeah, so basically, Vipraw, the way you should look at it, the day we get the approval, then it will 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 would take that kind of time. Yeah, so you, there can be some... Yeah, depending on what time we get the approval, yeah, so that, that's how the number will play out.
So, so there is a risk, right, on Q1 numbers for Vivo then, because we are already in February, so it will be 60 days. It means-
We mentioned, we're confident that the Vivo approval should come in soon. We already told that it will take 45-60 days to close the transaction. Now, of course, one can-
See, please appreciate that nobody can-
Beyond that, it's very difficult to give us any more, any more flavor on this.
Also. Thank you.
Thank you.
Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants, please limit your questions to two per participant. The next question comes from the line of Siddhartha Bera with Nomura. Please go ahead.
Yeah, thanks for the opportunity. Sir, my first question, on the mobile side, is, we had talked about addition of, another, global ODM. So if you can, give us some sense where it is and when, when should we expect that to come through? And, second, on the export side also, I think, we were seeing a good traction, which, also, has slowed down. So how do you think exports, can be in the next year, given these challenges? And, 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?
So responding to the first part of the question, the discussions with the new customer are on. We feel confident that we should be able to conclude it by Q1 of the forthcoming fiscal. Responding on exports, we are pursuing two opportunities. Motorola, it's already on. We have done exports of almost INR 4,000-4,500 crore in the first 9 months. We feel we should be closing at almost INR 5,500-INR 6,000 crore 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're going to graduate up to 5G, for 4G and 5G phones.
For this, a new facility is being planned down south in Tirupati. So that's where we are. So 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. So EU FTA is not helping us. On EU, EU FTA, we are still waiting for the fine print. We feel that it's definitely going to help us in our lighting business and also in our television business.
Got it, sir. Sir, last question is on the Q Tech. If you can highlight what revenues have you 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 eventually, gradually, it will only be for captive conversions? How we should look at the Q Tech numbers this quarter and next year?
So, Siddhartha, Q Tech numbers for quarter three was closer to INR 400-odd crores, and broadly, we are looking at a similar run rate of INR 2,000 crores for Q Tech. As we mentioned, in the next eight to nine months, we are significantly expanding the capacities. Last year, the volumes was 40 million. This year also, the volume should be closer to a similar number of million. But the idea is to take it up to almost 180, 190 million. So that's the reason the capacities are being expanded, more money is being put into the business. And also, the manufacturing process is being deepened. So we are deepening a little manufacturing so that we are able to capture more value, capture more margins in, in India. So that is being done.
So as of now, yes, they are supplying to some, they're supplying to some of our customers in the Android ecosystem. Some of the camera modules continue to be imported as well. So the idea is 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 fleet with all the customers in the Android ecosystem. So our target is, Siddhartha, continues to remain the same, which we guided earlier. The idea is to take these numbers up to 180-190 million in the next couple of years, do more manufacturing, increase the margins, and also, we are also beneficiary now of the ECMS scheme. So that's exactly what we're working on.
Got it, sir. Thanks a lot. I'll come back in the day.
Thank you.
Thank you. The next question comes from the line of Aditya Bhartia with Investec. Please go ahead.
Hi, good evening, sir.
Hi.
My first question is. Hi, sir. So 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? And in the last few quarters, have we seen this amount increasing or delays happening in terms of payments?
So Aditya, I don't have that number right now with me. I can share it with you separately. But broadly, we have been getting our PLIs from the government. So we have largely 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. But those numbers have been coming down, but I can share those numbers separately with you.
Sure, sure, sure. And, and there's no- there's not been any unusual delay, typically, that one year kind of a delay that we, we used to have. It's, it's a similar kind of a run rate that we are seeing?... Yeah, yeah, it's a similar thing. See, we have already got the PLI up to September 2025 in mobile, right?
Yeah.
Understood.
Yeah.
Sure. Sure. My second question is on slightly longer term growth levers. Once Vivo is completely operational, we have camera modules, display modules completely up and running. What are the other areas that we can kind of think about? And 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? And within the component ecosystem, are there new component categories that we can also evaluate?
Aditya, apart from mobiles, so mobile, 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 is going to operationalize our JV within Inventec, in which we are going to start with SSD and memory modules. And 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 INR 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 U.S. customers, for high for complex telecom backhaul microwave radios. This is going to be both for domestic market and exports. In this, again, we are deepening the manufacturing and getting into the component side. We have already got the ECMS approval for SFPs and optical transceivers, in which we are 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 product.
High-end, high-end professional lighting products, luminaires, and downlighters. In washing machines, we are expanding into the front loaders. That project, the building is ready, and the project is in the execution stage, and we are going to be setting up a capacity of almost 300,000 for 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 will be expanded to 3 million. And we have already launched 50 liters and 100 liters. We have already started work on side-by-side, double doors, deep freezers and mini coolers. So it's going to be a complete complex portfolio.
Now, we have taken a very senior resource in our south campus, very, very senior resource for building our industrial EMS business. So 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. And also, once this issue of Indo-U.S. tariff, and now with the Indo-EU tariff being optimized, we feel there's a tremendous scope for lighting exports now. So as of now, these are all growth triggers for us for next two, three years.
Sure, sir. And 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 right.
Perfect. Thank you so much, sir.
Thanks, Aditya.
The next question comes from the line of Bhavik Mehta with JP Morgan. Please go ahead.
Hi, thank you. Just one question. We just wanted to understand what is the update on the Longcheer JV in terms of the ramp-ups, since it was formed in September? How have the volumes been panning out this year, and what could be the volumes expected in FY 2027?
So Longcheer JV, we have already got the PN3 approval. We'll be signing the JV agreement by second week of February. The factory construction has already started. Longcheer management team has come and parked themselves in India. A new factory of almost 400,000 sq ft is under construction. It's going to be operationalized by second quarter, by first quarter end of the next fiscal. Initially, the capacity being created there is going to be of 18 billion 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.
Thank you. The next question comes from the line of Saumil Mehta with Kotak AMC. Please go ahead.
Yeah, 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 we go outside of JV as a pure contract manufacturer? And how should we look at that part of the business?
So we feel very confident. We are deeply involved in this process, and when I'm sharing with you this information, it's with fairly high level of confidence. So just bear with us and wait for us for some time.
So, okay.
For us, we are not sitting on a plan B, but we feel confident the approval should come in.
Okay, okay. And in terms of the volumes, can you highlight how the December volumes for the current quarter was? And we see there is a sequential decline. Which are the brands where the 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?
So as we mentioned, basically, as Mr. Lall mentioned in opening remarks, the impact of memory prices has been largely intense on the low end in the low-end phones and the mid-end phones. So that's where we have seen some kind of demand impact. So-
As we shared with you the last quarter numbers, the INR 6.8 million. But please appreciate, for us to share that in which brands there was a decline is not a very fair. It'll be difficult for us to share that.
But we can have-
The overall number we have shared with you.
Sure. And 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, yeah. So, one of our anchor customers has started manufacturing with another EMS company. But on overall volume basis, our numbers have not come down as compared to the last fiscal. But, as a part of their internal strategy, volume, certain percentage has been allocated to another EMS.
Yeah, so just to let you-
Sure.
Just to let you know, 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. So the last two years, the number has significantly grown for us.
Perfect.
Growing 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.
Thank you. The next question comes from the line of Chinmay Parab with an individual investor. Please go ahead. Chinmay, your line has been unmuted. Please go ahead with your question.
Hello, yeah. Am I, am I audible?
Yes. Please go ahead.
Sorry, 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, batten, downlighters through this partnership, and positioning us firmly at the center of ongoing consolidation within the Indian lighting industry. We are seeing several smaller and subscale players in the lighting ecosystem struggle to keep pace with the required investments in technology, quality and compliance, which is creating a favorable competitive backdrop for a well-capitalized, integrated platform like us. 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, U.K., UAE, and U.S. We continue to focus and invest in automation to further boost operational excellence and keep investing in backward integration to improve our cost efficiencies. So this is what I read out.
Yeah, thank you. Thank you so much for repeating that. Just want to talk about the current market scenario with respect to the 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 print, but we feel that the tariffs on lighting and LED TVs are a potential area for us, and we feel that they want to come down to practically zero, and that's an opportunity for us to capture the EU market.
That's great! Thank, thank you so much. Thank you so much, all the best for your future.
Thank you.
The next question comes from the line of Girish with Morgan Stanley. Please go ahead.
Hi, sir. Thanks for the opportunity. My question was just on CapEx. If you can just highlight for FY 2026 and FY 2027, how much is the budget? And, 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. And what could that ballpark number be from a CapEx standpoint that you would be investing?
So, first nine months, the CapEx outgo is INR 720 crores. We feel that in the overall fiscal, it should be somewhere between INR 1,100-INR 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.
Yeah, that number is confidential. We would not like to disclose that number of acquisition right now. The CapEx is INR 700 crores. Last quarter will be another INR 300, INR 350 or INR 400 crores. So we'll do a CapEx of closer to INR 1,100-INR 1,150 crores.
Sir, my last question was on IT and hardware products. So, we saw one-year extension being given by the government. I 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?
So this year, we feel the revenue should be in the range of INR 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 INR 3.5-4,000 crores.
Yeah, the order book looks, Girish, looks very healthy. So those, we will also freeze on those numbers in the next couple of months. But, clearly, the brands have, have indicated a very strong order book, so clearly, so that is also a growing vertical for us, with, with backward integration as well.
Sure. And if I heard you correctly, sir, you mentioned that you hired a senior resource for industrial business. So what segments are we talking here? Is it autos? Is it other industrial products like smart meters? If you can just highlight, like, what is the kind of capability by 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.
Okay, sir. Thank you so much.
Thank you. The next question comes from the line of Neeraj Jain with BNP Paribas. Please go ahead.
Yeah. Hi, sir. Thank you for the opportunity. Sir, my first question is on the HKC JV, just some clarification. So, PN3 approval required for the commencement of the facility has been, in case the PN3 approval doesn't come by the time the That's right. To commence the production or will it be still waiting for the-
I'm sorry to interrupt, Neeraj. Could you please use your handset?
Hello. Is it better now?
Yeah, far better. Could you please repeat your question?
Yeah, sure. So, 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 we'll still go ahead with the commencement, in case of we don't receive the PN3 approval, by the time?
No, no, it's not contingent on the PN3 approval. The construction is on. In fact, the building has been handed over to us, and the equipment has already landed at the port, so it's not contingent. But for us, it's an important partnership, and PN3's approval is important for us. But is the business contingent on 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?
Yeah, yeah, yeah, 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 will be a 100% subsidiary.
So, basically, we are not held back on any CapEx. And as you mentioned, the machineries have already been ordered. Some of them are at port, some of them are getting ordered. So there is absolutely no delay on account of not getting the PN3 approval till now, which we feel absolutely confident we'll get. But otherwise, it's absolutely the project is going on a normal, the way it should be going.
Sure, sir. That's helpful. And secondly, just wanted to check on the export orders for Ismartu. If I remember correctly, last year, we had been saying that we expect like a 3-4 million of incremental export orders coming from Ismartu, particularly for the Africa markets. So where do we stand now? Like, are we seeing those export orders getting executed this year or next year, or, like, is there any delay there?
So some exports has already started. We would have done almost 1.2-1.5 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. So that's where we are on Ismartu.
Sure, sir, that's very helpful. Thank you, and all the best.
Thank you.
The next question comes from the line of Rahul Agarwal with Ikigai Asset. Please go ahead.
Yeah. Hello, very good evening, Mr. Lall and Saurabh. Just few questions. Firstly, a clarification on the, on the pass-through date. You said that most of the memory pricing, I'm assuming that the INR depreciation here, because there is some element of imports, plus the metal, you know, inflation. All of this is a pass-through purely because we are a B2B, but is there a time lag between here, like, typically how it works for, ODM versus a brand? Will we-- Is there a possibility of temporary margin up, you know, downturn and then finally get the price hike? How does that work?
No, no, Rahul, it's immediate pass on, so there is no impact. This is a prescriptive business for us. So in any prescriptive business, the currency or commodity risks are immediately passed on. So there is no impact on our business.
Okay, perfect. Secondly, on the Longcheer, you said it will, you know, commence sometime end of 1Q27, and since the approvals are now received and you will be signing, you know, 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?
Yeah, that's, that's the right understanding, yeah.
Yes.
So business continues as is, only Q2, it will move to the JV and the new plant with the shareholding that we had agreed, 74-26.
There is no, you know, when we then basically shift to the JV, there is no delay between that production, right?
No, no, no. No, there will be no delay.
Okay. And as of now, Longcheer would be like, any guidance could you, could you share for the mobile business right now? Like how much business shifts from a, from a, you know, subsidiary business to the JV?
You have to wait on that.
Those numbers are being worked out, Rahul. We feel that in 2027, 2026-2027, it will be around 8-10 million.
Okay, got it, sir. And last question was on CapEx. You said INR 11 billion-INR 12 billion of CapEx. Just wanted to understand, and I know that components have lower or higher margins and similar ROCEs, but if you could just break down between the camera module, display module, and then the batteries mechanicals. I think 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 INR 1,100-1,200 crores. In Q Tech, the camera modules, CapEx intensity should be closer to INR 250-INR 300 crores. Battery, we still have not worked out the numbers, and we have not been... We don't have a technology partner right now as far as batteries is concerned, so we have not worked on that numbers. And,
SFP, that is optical transceivers, is INR 50 crore.
50 crore, yeah.
Mechanical extrusion is going to be another INR 50-INR 60 crore.
Fiscal 2027, is there a budget or any ballpark number, please?
It's still being worked out.
Okay, perfect. Thank you so much, and I wish you all the luck for the rest of the time.
Thank you.
Thank you.
The next question comes from the line of Keyur Pandya with ICICI Prudential. Please go ahead.
Thank you for the opportunity. Sir, first question is on the, say, mobile phones you mentioned too early to guide for FY 2027. Generally, whatever, say, a rolling plan we get from our clients, do we have any visibility on at least Q1? I mean, generally this supply chain takes time, and so we have to... Is it fair to assume that at least in the first half, we should see degrowth of volume? This is ex of new JV, I'm just saying.
I think we'll have to just-
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. So the brands themselves do not have an absolute clarity that how those numbers are gonna pan out. So I think we'll have to wait and watch for another two, three, four weeks to arrive at those kind of numbers.
Understood. Second question on overall numbers. So, I mean, ballpark at the EBITDA level, pure, pure mobile itself would contribute probably more than 60% of the EBITDA. Now, in this, in that backdrop, where all the CapEx of expansion on new categories would come on stream, either in Q3 or Q2 or Q3 of 2027. And is it-- I mean, should we assume that at least in the first half of FY 2027, we should be either flattish or, or, or degrowth in terms of, say, revenue or EBITDA?
No, we still have growth. We are still working on the numbers because there is some level of uncertainty, but we feel there will be growth in spite of these challenges.
In the first half-
Yeah.
of the year? Sure, noted. Sir, thanks a lot, and all the best.
Thank you.
Thank you. Ladies and gentlemen, we will take this as the last question. It's from the line of Nitin Kaushik with Afin Capital. Please go ahead.
Good evening, sir. Sir, am I audible?
Yes, yes, you are.
Sir, my question was, in previous phone call, you reiterated that the company is targeting over INR 100,000 crore revenue in the next 3-4 years. So 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 a new growth category triggers in front of us, which we are committed to. So we are committed to an aggressive growth for Dixon. I think we feel confident about it. We feel committed to that.
And there's also-
Uh.
We have seen earlier also in COVID period, the supply disruptions keep coming, but that doesn't change the overall outlook for the company, overall growth plan for the company.
Mm-hmm.
It can have some short-term challenges, but yeah, we are continuously working, not only on mobile phones, other verticals. We are just continuing through the growth plan in all our IT, hardware, telecom business, lighting business. And mobile, of course, is the largest trigger for our growth. But yeah, there are small supply chain disruptions which happen in business. But overall, nothing changes as far as long-term outlook is concerned.
Also, sir, the growth that you are guiding, so I think majority of that would come from mobile phones and other MS segment, right?
Yeah, so mobile undoubtedly is a large segment.
Mm.
But as we shared with you, we see a huge potential and upside in IT hardware for margin expansion-
Mm.
And also adjacency. We see a huge upside in our component business, and we have 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. So all these are triggers for growth. We are getting into new categories of industrial EMS.
Thank you, sir. Ladies and gentlemen, that was the last question. I now hand the conference over to the management for closing comments.
Thank you very much for participating in the 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.
Thank you. On behalf of DAM Capital, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.