The company said its wholly owned subsidiary, Dixon Display Technologies Pvt. Ltd. (DDTPL), will be converted into a joint venture entity. Dixon will hold a 74% stake in the business, while HKC Overseas will own the remaining 26%.
Following the completion of the transaction, Dixon Display Technologies will operate as a joint venture company. The company said the partnership will combine Dixon’s domestic manufacturing presence with HKC’s global capabilities to expand production of advanced display modules for India’s electronics and automotive sectors.
The joint venture will manufacture, develop and distribute thin-film transistor LCDs, liquid crystal modules and other advanced display components. These products will serve a wide range of applications, including notebooks, mobile phones, televisions, automotive displays, industrial equipment, and monitors.
According to Dixon Technologies, the venture is expected to help deepen India’s domestic electronics manufacturing ecosystem, reduce reliance on imports and support the local component supply chain under the government’s Make in India initiative.
The investment from HKC required approval from the central government under Press Note 3 of 2020 and the Foreign Exchange Management (Non-Debt Instruments) Rules, 2019, due to cross-border investment norms.
Dixon Tech Q3 snapshot
Dixon Technologies reported a net profit of Rs 287 crore for the third quarter, up 67% year-on-year. The increase was largely driven by a one-time gain of Rs 131 crore arising from the fair value adjustment linked to Dixon’s stake sale in Aditya Infotech Limited related to its lighting business undertaking.
The company recorded revenue of Rs 9,750 crore from its mobile and other electronics manufacturing services (EMS) division, which generated an operating profit of Rs 350 crore.
However, revenue growth was impacted by a slowdown in smartphone shipments. The company said shipments fell 7% year-on-year in the post-festive quarter, weighed down by elevated inventory levels and higher memory costs.
Shares of Dixon Technologies have declined nearly 16% over the past month. The stock is down 45% over the last six months and has fallen 19% since the beginning of the year.
Sensex, Nifty today: Catch all the LIVE stock market action here
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times.)