Electronics companies’ shares slide as Dixon show disappoints

Mumbai: Shares of electronics manufacturing companies (EMS) companies had been among the many prime laggards on Tuesday after the third-quarter outcomes of Dixon Applied sciences, one of many nation’s largest gamers within the phase, disenchanted buyers.

Dixon shares plunged 13.9%, Kaynes Know-how tumbled 9.7%, Amber Enterprises slumped 7.6%, Syrma SGS Know-how declined 4.7% and PG Electroplast fell 6% on Tuesday.

“Dixon’s Q3 numbers had been barely beneath expectations on a quarterly foundation and the inventory has been buying and selling at a particularly excessive valuation which led to a fall on Tuesday,” stated Apurva Sheth, head of analysis at Samco Securities. “Different EMS firms like Kaynes and PG Electroplast additionally declined as Dixon is the chief within the house and the market was not pleased with its numbers which rubbed off on different shares as nicely.”

The business has been a Dalal Avenue favorite lately, because of fast progress fuelled by demand for its merchandise for manufacturing smartphones to shopper items. All EMS shares, apart from Syrma, jumped 78% to 290% previously 12 months as in opposition to the 11.7% upmove within the Nifty 500 index”Because the sector has moved up sharply previously 12 months, the room for disappointment is decrease, due to which any disappointment triggers a sell-off,” stated Siddhartha Khemka, head of retail analysis at Motilal Oswal Monetary Providers. “However in our view, EMS stays a superb excessive growth-high valuations sector and since there is no such thing as a influence on order e-book or progress, our outlook stays constructive.”Sure Securities downgraded Dixon to ‘Promote’ with a revised worth goal of ₹15,138 citing unfavourable “risk-reward”. That is near Tuesday’s worth of ₹15,118.InCred Equities maintained its ‘Add’ ranking and revised its goal upwards to ₹20,200 after the December quarter outcomes. JM Monetary additionally maintained its ‘Purchase’ ranking with a worth goal of ₹19,000.