Dixon profit drops 44.90% as costs outpace revenue and other income fades
Revenue rose 46.71% year on year, but operating margin fell to 2.74% as material costs increased and the tax rate moved higher.
Filed 30 Oct 2026, 16:07 IST · after market close · Dixon Technologies (India) Ltd (DIXON)
Key takeaways
- Consolidated net profit fell 44.90% year on year as other income dropped 85.60% and the tax rate rose 3.56 percentage points.
- Revenue grew 46.71% year on year, but expenses grew faster at 48.29%, narrowing operating margin by 1.04 percentage points to 2.74%.
- Operating margin declined for a second straight quarter to 2.74%, 10.35 percentage points below the 13.09% median for 129 reported Consumer Discretionary peers.
Price around the results
Revenue accelerated, but profit quality weakened
Consolidated revenue rose 46.71% year on year and 40.17% quarter on quarter, while operating profit increased only 6.32% year on year and 28.87% sequentially. Net profit fell 44.90% year on year and 42.76% sequentially because other income declined 85.60% year on year and 86.68% quarter on quarter. Other income accounted for 13.44% of pre-tax profit in the current quarter, so the prior-year profit comparison was also affected by a much higher non-operating contribution.
Material costs pulled operating margin lower
Expenses grew 48.29% year on year against 46.71% revenue growth, narrowing operating margin by 1.04 percentage points; sequentially, expenses also grew slightly faster than revenue and margin fell 0.24 percentage points. Management's presentation said cost of material consumed rose to 94.9% of operating revenue from 92.9% a year earlier, a 2.0 percentage-point increase. The tax rate rose 3.56 percentage points year on year and 5.43 percentage points sequentially, further weighing on net profit, while interest expense was down 32.33% year on year but up 7.59% quarter on quarter.
Second consecutive quarter of margin decline
Operating margin had risen to 3.89% in Q4FY26 before falling to 2.98% in Q1FY27 and 2.74% in Q2FY27. The current margin was 10.35 percentage points below the 13.09% median among 129 Consumer Discretionary peers that had reported the same quarter, placing Dixon 18th from the bottom on this measure. The sequential revenue increase shows momentum in sales, but it has not yet translated into a recovery in operating margin.
New categories and receivables remain in focus
Management said Dixon is diversifying into new product categories and highlighted its collaboration with boAt on twin wireless speakers. The company also said partnerships with Asus and HP supported growth in its IT hardware division, while it incorporated Adivistar Electronics India as a subsidiary during the quarter. Management's presentation said PLI incentive income of Rs 1,110.06 cr remained receivable pending formal determination and disbursement.
Results filed after market close
The results were filed after market close, so there is no post-results stock move to assess yet. Across eight prior result reactions, the stock rose three times and fell five times, with a median absolute move of 5.76%.
Q2FY27 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q2FY27 | Q1FY27 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹21,794 cr | ₹15,548 cr | +40.17% | +46.71% |
| Other income | ₹72 cr | ₹537 cr | -86.68% | -85.60% |
| Expenses | ₹21,197 cr | ₹15,085 cr | +40.52% | +48.29% |
| Operating profit | ₹597 cr | ₹463 cr | +28.87% | +6.32% |
| Operating margin (%) | 2.74% | 2.98% | — | — |
| Interest | ₹26 cr | ₹24 cr | +7.59% | -32.33% |
| Depreciation | ₹110 cr | ₹107 cr | +2.91% | +14.31% |
| Profit before tax | ₹532 cr | ₹869 cr | -38.74% | -42.36% |
| Tax | ₹121 cr | ₹151 cr | -19.63% | -31.71% |
| Net profit | ₹411 cr | ₹718 cr | -42.76% | -44.90% |
| EPS (₹) | ₹67.44 | ₹118.00 | -42.85% | -45.44% |
Operating margin of 2.74% compares with a Consumer Discretionary sector median of 13.09% across 129 peers that have reported Q2FY27.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
New initiatives
- Dixon incorporated Adivistar Electronics India Private Limited as a subsidiary during the quarter.
- Dixon is pursuing diversification into new product categories.
- Dixon collaborated with boAt to produce innovative twin wireless speakers.
- Strategic partnerships with Asus and HP supported growth in Dixon’s IT hardware division.
Problems & risks
- PLI incentive income of Rs. 1,110.06 crores remained receivable pending formal determination and disbursement.
- Cost of material consumed increased to 94.9% of operating revenues in Q2 FY27 from 92.9% in Q2 FY26.
- ROCE declined to 29.7%, down 1,510 basis points from 44.8% in FY26.
What to watch
- Whether operating margin improves from 2.74% after two consecutive quarterly declines.
- Whether cost of material consumed falls from 94.9% of operating revenue.
- Whether the Rs 1,110.06 cr PLI receivable moves through formal determination and disbursement.