Dixon Technologies (India) Limited (DIXON) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Dixon Technologies Q2 FY '26 Earnings Call hosted by DAM Capital Advisors. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Ms. Bhoomika Nair from DAM Capital Advisors. Thank you, and over to you, ma'am.

Thank you, and good evening to everyone. Welcome to the Dixon Technologies Q2 FY '26 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 '25-'26. Key highlights for the quarter as below: Consolidated adjusted revenues for the quarter ended September 30, 2025, was INR 14,858 crores as against INR 11,528 crores in the same period last year. That's a growth of 29%. Consolidated adjusted EBITDA for the quarter was INR 564 crores against INR 420 crores in the same period last year, a growth of 34%. Consolidated adjusted PAT for the quarter was INR 323 crores against INR 236 crores 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 mid and 21st September, most customers and retailers deferred buying decisions in anticipation of a lower post-cut prices. Although demand began to normalize after the new GST rate came into effect on September 22, the short window of 9 days for the quarter end was insufficient to fully recover deferred volumes. As a result, our Q2 top line reflects this time distortion specifically for the TVs, refrigerators and washing machines. Upholding our focus on financial discipline, we efficiently manage our working capital cycle at negative 6 days, complemented by a strong balance sheet reflecting a net debt position of INR 203 crores. 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 a 74:26 JV with HKC for display modules, we are creating a capacity of 24 million per annum for the smartphones and 2 million per annum for notebooks, which would be for 76% of captive consumption. In the second phase, we'll enhance its capacity to 60 million units per annum for the smartphones, which will account for almost 80% of the captive consumption, and we're also foraying to 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. The acquired 51% stake in Q Tech India for manufacturing a supply of camera and fingerprint modules for smartphones, IoT and automotive applications and have started consolidating the financials from September 26, '25. In the next 6 to 9 months, investments will be made to expand the capacities and deepen the level of manufacturing. And we feel confident the volumes of smartphone camera modules been an increase from 40 million units and revenues by INR 2,000 crores in last financial years to 190 million to 200 millions units per annum with a revenue closer to INR 6,000 crores to INR 7,000 crores and sub-10% EBITDA margins in the next 2 to 3 years. In line with our backward integration strategy for automotive components like display, we will also increase the focus on automotive camera modules under this company. We have filed a component ECMS applications for display modules, camera module enclosures, lithium-ion batteries, optical transfer -- transceiver SFP and also mechanical enclosures with investment commitment of approximately INR 3,000 crores over the next 3 years. So 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 crores, with a growth of 41% year-on-year and operating profit of INR 472 crores, a growth of 53%. Out of this revenue, for telecom, IT hardware, hearables and wearables was INR 1,635 crores, INR 331 crores and INR 207 crores, respectively. We witnessed a strong momentum in the quarter with healthy volume growth across the various smartphone brands. Dixon remains the largest domestic manufactural 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 400,000 square feet facility with the JV, which is expected to be operational by April '26. And 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 1 billion square feet of 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 '26. We are in active discussion with another large ODM of smartphones and the manufacturing for them should start by Q4 of '25-'26. 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 introduced unique features like Karaoke inside a TV. We have set up a state-of-art CKD robotic LCM line for large-sized IFPD televisions and signages. And we're actively working on increasing capacities and enhancing capabilities for manufacturing for industrial institution and automotive displays. Refrigerators, another reason for subdued growth in the quarter is the introduction of new and more stringent energy efficiency norms in India, leading to postponement of purchasing the ROC enforcement deadline. In addition to the large capacity in direct cool category, we have also now started new products in the coolant 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 2 doors side-by-side refrigerators. Home appliances 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 FATL in Tirupati is ready for commencement for production by end of Q3 and are in the process of ordering a regional production line, launch of SAWM, that is semi-automatic washing machine in 16 kg and 18 kg capacity, which will be the first across the industry and expect to be launched for December '25. Production of robo vacuum cleaners to Eureka Forbes is to start by December '25. We have appointed a very senior expat to drive the project for front-loading washing machines and foraying into various other home appliances. We are 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 Lightanium Technologies, that is a 50-50 JV between Dixon and Signify, started in August '25. The order book looks robust with new categories of premium indoor and professional lighting products, and we are working to utilize all the potential synergies in the business in the upcoming quarters with a new partner. We have 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. 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 and we also have a stable order book for our anchor customer on CPE 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 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 have already started localizing components like mechanicals, plastic moldings, power supplies. The telecom segments present a robust and long-term growth rate and can potentially be the second largest driver for growth after our mobile business. Laptop, tablets and IT hardware products. The segment saw a 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 was strong for the upcoming quarters, and we are further expanding our capacity. We have successfully shifted ASA from our Noida facility to Chennai facility and the start of mass production from this quarter. We have finalized our manufacturing location for a 60-40 joint venture with Inventec Corporation of Taiwan. It is one of the world's top 5 IT products ODM for manufacture 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 ECM as an IT hardware PLI scheme will lead to significant margin expansions. Wearables and hearables, revenue for this segment was INR 207 crores 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 with JV with Rexxam was INR 79 crores and business had a relatively weak quarter, primarily due to subdued demand in the AC market. Our 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.

[Operator Instructions] The first question is from the line of Aditya Bhartia from Investec.

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?

So Aditya, we are in discussions with a large ODM for the smartphones. And we are expecting that this business should start by end of Q4 of this fiscal or early Q1 of next fiscal. The expected volumes are in the range of around 0.5 million per month, that's the volume we're looking at. As far as more detailed granular level details of ODM, it's not prudent at this time to share.

Sure, sir. And sir, 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?

So Aditya, if you look at the numbers, we grew from INR 700-odd crores to -- and this year, we're going to be almost at INR 4,800 crores. Till now largely, we are on the CPE product, the consumer premises end product, which comprises mainly of wifi routers, which comprises of fixed wireless access 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 operational efficiency, and we have a large partnership with large principal globally. What we wanted to do 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. So we have been able to secure an order with a U.S.-based company, which is into radios. And the pilot is going to be done by December and the commercial production should start by March. And by Q2 or Q3 of next fiscal, the exports are going to start. So initially, this business I feel is going to be about $150-odd 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 $1 billion. So does that satisfy you, Aditya?

Sir, the line for Mr. Aditya has disconnected. We'll move ahead with the next question. So the next question is from Sameet Sinha from Macquarie.

If you can talk about this ODM, can you give us more color around it? Does it emerge from maybe the Longcheer relationship, whether it's closed or not, but you definitely get the benefit of that? Is that something that you've got over from outside of the country? Is it domestic? And my second question is, 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?

So responding to the first part of question, this is a large global ODM. To start with, there's going to be India-focused relationship. There's going to be an additional volume that what we are presently doing for India market for a large brand in India. And our relationship with Longcheer is on a separate axis, which, in any case, is a robust relationship. And 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 CPE product. And 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 works. We are targeting the pilots to happen by December and the commercial production to happen in the Q4 of the current fiscal. We feel, and we have been assured by our partner, that India and Dixon would be the footprint for servicing a part of the global market in this category. So 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 hedge outside of CPE?

So definitely, it's an aspiration for us, and I've been talking about in an earlier earnings call. So we have brought in a senior resource at vice president level. We'll start strategizing and rolling out our non-CPE category business. We'll definitely be working on it, but it's slightly premature to share with you the granular level details a bit. But as far as the ambition and aspiration is concerned, it's a focus area for us, for which a resource has already been hired.

The next question is from the line of Siddhartha Bera from Nomura.

Sir, first question is, on the mobile side, now with another new customer and a good order book, possible to share some targets for this year and next year? I mean, we had expected 43 million to million year. Does that remain on track? And do you see a scope to revise that on for next year as well?

So 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. So next year, we feel that we should be somewhere between 55 million to 60 million.

Understood. And sir, that is including Vivo, you expect 55 million to 60 million?

That's right.

Okay. Are we sort of slightly -- because I think last time we discussed, we had targeted between 60 million to 65 million. So are we sort of slightly cautious in terms of ramp-up? And are we seeing any impact from the exports market as well in terms of demand?

No, I'm not seeing any cut or anything. But what I'm just putting across to you is a particular rate, one still maintains somewhere between 60 million, 65 million or something like that, yes.

Understood. And on this new segment of front-load and refrigerant 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 washing machine as well, if can you share some color about the ramp-up?

So front-load is still on the conceptualization stage. Very senior resource and expat 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 to 200,000. It's going to be an extension of our Tirupati plant.

The next question is from the line of Vipraw Srivastava from PhilipCapital.

Sir, quickly on the mobile phone volume side, what's your outlook for quarter 3 and quarter 4, given the festive season is now over?

So it's still in works. At this stage to share the numbers would be slightly difficult.

But Vipraw, we just shared the numbers in the last. So we just shared...

Overall, we are sharing with you is going to be 42-odd million in this particular fiscal. And we've already done around 20 million till now.

Right, sir. And sir, at the beginning of the year, the firm has given a guidance for 40%, 45% revenue growth. Does the firm maintain this guidance for this quarter?

First of all, we never gave any guidance.

We don't give any guidance.

Okay. No worries, sir. And last question from my end. Given that Ismartu has done very well for the firm, what kind of ramp up do you expect from Ismartu? You were expecting exports to Africa and other markets, is that still on track?

So we are working on exports. The export has already been initiated. We feel that it's an extremely potential area, which our partners in Ismartu are absolutely open and committed to. The plans are being made. We'll have to expand our capacities. We've 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 under Transsion brand for the world.

We now have the next question from the line of Sonali Salgaonkar from Jefferies.

Sir, my first question is on the other nonoperating income. There is a very sharp increase this quarter as compared to last quarter or even the last annualized year. So maybe understand what exactly is causing this jump? And is there any one-off?

Sonali, basically, there are mark-to-market income of a 6.5% stake in Aditya Infotech, which is now a listed company. So the market cap as on 31st December -- as on 30th September into 6.5% stake is what we have valued that. So we've initially valued at a particular value, but now the value is established as a listed company. So for the last 1 year, we have been booking that mark-to-market. So now a large part of that mark-to-market has come up in September too, and we have to continuously now, depending on how that all the market cap of that company behaves, we have to do it every quarter.

So essentially, if I understand, this is a one-off only for this quarter. This big an amount will not sustain in the next few quarters, is that right?

Yes. So that's why we have reported the adjusted numbers as well as reported numbers. So the numbers shared in the opening remarks was all the adjusted numbers without any impact of this onetime gain.

Understood. Got it. And my second question here is on the CapEx. The CapEx guidance, do you stick to that, the one that we have put out in the earlier quarters?

So Sonali, we have done a CapEx of INR 550-odd crores in the first 6 months, broadly that should be the going run rate for the next 6 months as well.

Happy Diwali to both of you.

Thank you. Happy Diwali to your family.

The next question is from the line of Dhruv Jain from AMBIT Capital.

My first question is on the Longcheer JV. So if you could just provide an outlook with respect to what kind of volumes are we expecting through this JV? And is it included in the 55 million to 60 million volume guidance that you spoke about now?

So we feel, Dhruv, that the JV should become operational by first quarter of next fiscal. We feel that the volumes in this JV for the next fiscal should be somewhere around 8 to 10 million. And this is going to be a part of 60 million, 65 million that we are talking about for next fiscal.

Okay. And sir, the second question is on the PLI. So if you could just spell out what was the PLI contribution in your EBITDA this quarter? And we note that there is a large INR 1,400 crores receivables from government on PLI. So I just want your -- any update on that? Because we see the annual report that the last received PLI was on 31st December 2023.

So just to update you, Dhruv, one on the PLI, so we have received our claim as far as the mobile business is concerned till September '24. And from October '24 till June '25, it's presently getting appraised, and it's almost on the last stages of appraisal. Telecom PLI for last financial year, '24-'25, we have received. And now once we achieve the threshold of CapExes for this year, we will file a claim, but that will most likely will happen next year only for '25-'26. And also our PLI for telecom and for 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. So this is the status. So yes, the numbers would be similar. My sense, broadly what you had mentioned INR 1,400 crores, INR 1,500 crores is the receivable that is correspondingly payable to that effect as well and the difference is our share of income as well. So in this quarter 2, we have booked an income of across all these four PLIs, which I mentioned because IT PLI will happen only happen from next financial year. So this four PLIs put together, we have an income which has been booked out closer to INR 150-odd crores.

This is for the first half of the year?

No. First half is closer to INR 280-odd crores.

Happy Diwali.

The next question is from the line of Indrajit Agarwal, CLSA.

I have a follow-up on the mobile volumes. So 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. So shouldn't it be much higher number than like the 55 million, 60 million units that you're guiding for next year?

So Longcheer is also their existing volume that we are doing with Longcheer. That is going to be shifted to 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 Vivo and the second is the new ODM partnership that we are pursuing. So these numbers are not static numbers. These are aspirational numbers. We feel that we have been conservative in sharing these numbers. The upside can be much more on that.

And sir, taking a slightly medium-term view, at 60-odd million units, you would be probably 55%, 60% of the outsourced smartphone market in India. So 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?

So in mobiles, we feel that there's still -- there is 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 volumes. In any case, in mobile space, the huge focus is now going to be on execution of our display project because it's margin accretive and it gives us the moat and tenacity in business and also our camera module product. So that is the mobile ecosystem that we are working upon, that 65 million, 70 million, 75 million numbers and display camera module in-house and a significant portion beyond the 65 million, 70 million goes in for exports. That's the path we are pursuing. Let's see where we reach.

The next question is from the line of Achal from Nuvama.

Sir, just on the PLI thing, if you could highlight, just clarify the number what you gave, INR 150 crores for 2Q and INR 290 crores for one half, is that the gross or is it the net our share?

So that is broadly our number only, it is our share.

That is our share, okay. Secondly, sir, there have been some media murmurs about 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?

So there are some discussions, which has started between the government and the stakeholders for giving additional support to mobile sector. However, it's at a very preliminary stage. But what you're saying is right, the discussions have been initiated.

Understood. And just a clarification, given, let's say, theoretically, if it was to expire on 31st March '26, do you see any margin pressure for any of the quarters of FY '27 before we see the integration benefits actually kicking in?

So there can be some pressure for a couple of quarters by the time with display and camera. So camera module has already started happening because there's a running plant. In display, the plant is going to become operational only by March, April. So yes, there can be some pressure for a couple of quarters in '27.

Got it. And 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?

So we feel, although it's at a very initial stage, that our relationship with Inventec is going to be leveraged for that.

And what kind of BOM can we cater to out of the entire data center CapEx?

We are basically talking about the servers.

Right. I mean, I was just trying to understand the quantum, could that be 20%, 30%, could that be 10%, any approximation?

No, that will be difficult to put in a number to this at this stage.

It's part of our discussions and agreement with them.

The next question is from the line of Madhav from Fidelity.

I just wanted to check the 8 million to 10 million volumes for Longcheer JV, which we are speaking about. I mean just want to clarify that currently, it was 100% Dixon-owned entity, which will now shift to a JV. So 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?

So it's the 74:26 JV, that's the base we're going to split. But with the JV, we also bring in much more operational efficiency. The complete talent pool is going to be available to us for enhancing our efficiency. But yes, the margins are going to be shared.

Madhav, there can be possibility of additional volumes so that business line is getting burned now. And yes, there's a possibility of getting additional volumes as compared to what we are doing right now for them.

Okay. Okay. So this is a volume that we already do, it's not a new volume that we get with the Longcheer. I just wanted to clarify that.

Madhav, we have been conservative. We feel that these volumes are going to go up. But yes, let's see because they're working on some other large contracts. So on an overall basis, we feel that it's going to be a trigger for growth for us. But as of now, if I take it, it's a transfer of the LC volumes from Padget Dixon to JV.

Okay. Got it. And just on the IT hardware, could you give us a sense in terms of the ramp-up for the next 1 or 2 years, how that ramps up?

So this year, we are targeting revenues of almost INR 1,200 crores to INR 1,300 crores in this business. We've already started commercial production for HP, for ASUS. For Lenovo, the production is already happening in our Noida plant and also now Acer production has shifted. The ramp-up is taking place, taking up well. And also our JV, which is in the same product category with Inventec, it's going to get implemented and commercial production will start by Q2, Q3 -- Q2 of next fiscal. We feel that the IT business for us in the next 2 years should be around INR 4,000 crores to INR 5,000 crores business.

The next question is from the line of Pankaj Tibrewal from Ikigai Asset Management.

Happy Diwali as well 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 gazing over the next 3 to 5 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 3, 4 years?

Pankaj ji, as we have been sharing with you that the way we look at our business is that we look at a large opportunity pool. And once we have a 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. And what has worked pretty well for us till now is this kind of foray. And definitely, the trigger of our growth in the last 2, 3 years has been mobile. In mobile, already, we feel we're going to be at 65%, 70% of the Indian addressable market. Now we want to leverage our relationship with Ismartu, Transsion, which is already the fourth largest brand globally, for getting into global markets. And what we are aspiring to do as far as the cost structures are concerned, that without the PLI benefit of the Government of India, we become 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 see is going to be extremely important and we are extremely focused on us 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. And also a positive part of this business, that in spite of having a lower asset return -- asset turnover ratio, the ROCE in this business is also going to be high. So my balance sheet is just not getting disturbed. So component focus is going to be an important area. And component focus is not only going to be for a 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 player. So that is one area. The second area, which I'm talking about is a JV with Airtel, which is our telecom product. The telecom product growth has already seen a very high growth. And now we are fortunate, we are lucky, we're blessed that we've had this breakthrough into the non-CPE radio network category, which is a large category. Now obviously, we have to acquire lot of capabilities in that and it requires a different set of capabilities and execution. If we are able to do it, then that's largely for the global market. So that can be a large play. And then, of course, we're excited about the JV with Philips, with Signify for lighting. That takes us into more premium category and hopefully opens up for us the global market, just like we have done with their partnership in China. So these are all triggers of growth. And similarly, the IT products, which we feel that in the next 2, 3 years, it can be a INR 5,000 crore business. And again, backwardly integrated, in-house display, in-house mechanicals, in-house SSD modules, in-house memory modules and also the power supply units. So these are all figures of growth, Pankaj ji.

And when I look at the IT hardware, notebooks, laptops, globally, it's about $180 billion, $200 billion TAM. And 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 could also be a potential large TAM, which Indian companies like us can cater to?

Indian market for IT products is approximately $12 billion to $13 billion. And in IT products, India is a signatory to ITA-1. So government is not able to create a duty arbitrage for promoting domestic manufacturing. In the policy framework, what they've rolled out the PLI, IT PLI, which is -- are we very candid? At present when I see the disability that when we're importing at 0% duty product what is made in India, there is a 4% to 5% disability. That 4% to 5% disability in Dixon, we are trying to cover up through our component play that is namely display, mechanicals, power supply, SSD. Once we are able to do it in the next 7 to 8 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 to $8 billion. So one is able to cater to that, then I think for Dixon, it can be $1.5 billion, $2 billion business, domestic market. But it's a journey. You see, please appreciate in mobile also, it has taken 4, 5 years for India to become a hub for mobile phones exports. I feel with slightly longer-term, 4, 5 years, India can become the hub for exports of IT products also. Definitely, it can. Because in any case, a normal laptop is getting commoditized. And it cannot be produced in Taiwan. And at some point, possibly even China is going to exit. So it's going to be almost a similar journey and trajectory, which we have seen in mobile.

That's fantastic. And last, when you guys raised capital in 2017, I clearly remember, 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. And this has been an amazing journey. But when you expand yourself for the next 5, 7 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? Or do you think that external capital will be required for the next leg of growth as you move ahead?

So Pankaj ji, 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 plan that we have in front of us, and we have adequate internal cash flows to support it. So as of now, we are 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. But as of now, we have adequate cash flow to support the growth that we are sharing with the Street.

I think the company is a classic example of what disciplined capital allocation can do, 20x with revenues with zero external capital, that IPO is amazing. Congratulations to the entire team. Happy Diwali.

Thank you. Happy Diwali.

Thank you. Happy Diwali.

The next question is from the line of Onkar from Shri Investments.

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 rates that you can target because now the base has become so large and even the high-growing category, which is mobile, now you are virtually more than 60% of that category. So like how can we model Dixon from here on?

So 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, where we're expanding the capacity from 1.2 to 1.7. And in the next phase, we are taking it to 2.5, expansion of the product portfolio. From DC, 190 to 210 liters to 50 liters, 100 liters to new models, to deep freezers, to visi coolers to side-by-side expansion of our appliances category. There's a washing machine into new category of front loaders. And also we are exploring the possibility of getting into dishwashers and microwaves. So these are all expansion things. As far as the numbers is concerned, it will be very difficult to put it into numbers as of now. Or if you want to have a better insight, you can have a separate one-to-one with Saurabh. He will give you a better insight on this.

Okay. But all these categories, which you mentioned, in the context of overall revenues, which we are currently having or which you will be having in a year or 2, they're so small that even if they grow very fast, there won't be any large impact on the overall revenue front.

But we continue to grow in mobiles. We continue to grow telecom. We mentioned the opportunity that are there for the non-CPE products and CPE market also continues to grow with our anchor customer. And we mentioned about refrigerators. Yes, so all of them, the larger revenue growth opportunities will be mobile, IT hardware, telecom. But other businesses will also be growing at a decent pace. The combination of all put together, I think, it should be a very -- that should be a very strong growth for the next couple of years at least we have that kind of visibility.

So I mean, you haven't given any formal guidance. But in an interview to CNBC, you had mentioned that you will be targeting around INR 1 lakh crore of sales in the next 3 to 4 years. I mean, is it possible to do that?

We feel confident about it.

We feel confident about it. So we can, yes.

Okay. The integration which you mentioned, so I mean, with that INR 1 lakh crore of sales, I mean what kind of margins we can see until that level of sales is achieved?

So with more backward integration, operating leverage and some bit of ODM business largely in refrigerator, and also -- yes, so my sense is it should be do -- very difficult to say, but yes, the range can be somewhere around 4%, 4.5%.

So from current around 3.7%, 3.8% to 4.5% you are expecting?

I said, I gave a range to you, 4%, 4.5%.

Around 70, 80 bps uptick.

Yes, 70, 80 bps.

The next question is from the line of Rahul Agarwal from Ikigai Assets.

Just a couple of questions. Firstly, on the promoter holdings. I see when I look at last 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 the stake is now down to 29%, almost 5% of the company has been sold over the last 3 years. Is the intent of the family now done with in terms of whatever personal needs they have? Or could we see more liquidation?

So if you see the combined shareholding of promoter and the family and myself is more than 42%. Second, we don't see any more dilution happening, and that's it.

Okay. Got it. And secondly, just you haven't spoken about the battery energy storage systems. Just your thoughts Atul ji will really help on battery, please.

So we're looking at the lithium-ion product, lithium-ion battery product, mainly focused on mobiles, because we have a large captives. We are in advanced stages of discussions with our technology partner. The project plans are getting fructified. So that's the stage we are. We've already submitted our applications for ECMS. So that's where we are.

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, Ismartu, which is a Transsion brand company. They'll be taking the lead in this project.

Happy Diwali to both of you.

The next question is from the line of Vaishnavi Gurung from Craving Alpha Wealth Fund.

My first question is a follow-up question. As you mentioned that you're expanding to different segments like laptop, telecom, so if you can put a number to this, like what can be expected diversification in terms of revenue by FY '30?

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 manifold, but putting a number to it at this stage is premature.

Okay, sir. Sir, my second question is having Vivo as our client, considering Vivo's market share in India is the highest currently, so do you see the shift from our top 3 clients current will shift -- like one of them will be Vivo?

Yes, it's going to be a large customer, you're absolutely right.

So you're absolutely right. They are doing very well and they have the largest market share today in the Indian market.

Right, sir. Do you think Vivo will replace our anchor client, Motorola, in this case?

See, we aspire that both of them become our anchor customer, so yes. But Vivo is going to be a large, large customer for us when there is...

Sir, by any chance you can share the percentage of revenue by our anchor clients currently?

That, we generally don't share.

That's confidential information.

That's confidential information, and we don't share that.

Okay, sir. Sir, my last question is in terms of revenue growth this quarter, if we see the last 3, 4 quarters, we have averaged out to a growth of 100% year-on-year, but this time, I think it was approximately 28%.

Absolutely right. So on the last...

Yes, sir, if you can put some light on that?

Please appreciate on a large base, we can't grow on 100%. The base has become very large. But the growth is going to be aggressive, please be rest assured on that.

The next question is from the line of Madhav from Fidelity.

My questions have been answered, sir.

The next question is from the line of Sameet Sinha from Macquarie.

I guess I just wanted to understand, I mean, the domestic opportunity is what you discussed that many people have mentioned that 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 that manufacturing. Can you give us more insight into where could that growth come from? As in where the volumes come here to be manufactured and then, 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 serve volumes that you can generate?

So the global market in our Transsion partnership is going to be mainly Africa and possibly Latin America. Our other anchor customer relationship is exposed to U.S.

And where could these incremental -- as you capture more volume from rest of the world, where could that come from? Is that China? Which parts of the world?

So shifting you're talking about, is it?

Yes, shifting.

So I don't want to name any country, but our exports is going to be mainly focused in our partnership to Africa and Latin America with one relationship and with another relationship to the U.S.

The next question is from the line of Bhavik Mehta from JPMorgan.

A couple of questions. Firstly, on the HKC JV, I understand it will be largely for captive consumption. But in terms of EBITDA uplift, what kind of levels we can target in FY '27-'28?

So as a margin, we feel that it's going to be in mid-to-high teens. Finally, we feel that this can be -- once we reach our peak levels, which is almost 60-odd million of mobile phones, wherein 60-odd million, it's going to generate a revenue for us of almost $600 million. We are talking about 2 million, 2.5 million of laptop display, which is going to be another $100 million. And then we are talking about the TV display. It is going to be almost 1 million to 1.5 million. It is going to be another $60 million. And the automotive display is going to be around 20 million units. So overall, we're talking about $800 million to $900 million of business. That's what we are aspiring for in next 2 to 3 years.

That's helpful. The second question is on Q Tech India. For this year, FY '26, what kind of revenues and EBITDA we can assume? It was INR 2,000 crores last year. But this year, are you ramping up the capacity, which can drive some incremental revenues as well?

See, the capacities will take some more time. We've put some money in the company. That will happen over a period of time and also the deepening the level of manufacturing there. But in the first 6-month numbers, definitely, there is an uptick in those numbers compared to the period last year. So definitely, these INR 2,000 crores should grow, but very difficult to put a number, but my sense is it should be a double-digit kind of a growth this year on an annual basis. And as we continue to deepen as we expand more capacity because the land bank is there, we just need to expand this capacity. And 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 million, 200 million in the next 2.5 to 3 years. So every year, that number of 40 million will continue to grow with more backward -- with more deepening of manufacturing.

Thank you. As there are no further questions, we would now like to hand over the conference over to management for the closing remarks.

So 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 all 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.