Dixon Technologies has signed a binding term sheet with Vivo India to establish a joint venture (JV) focused on the OEM (Original Equipment Manufacturer) business for electronic devices, including smartphones. In this agreement, Dixon will hold a 51% stake, while Vivo India will own the remaining 49%. Importantly, there will be no cross-shareholding between the two parties.
This collaboration positions Dixon Technologies to expand its manufacturing capabilities beyond Vivo-branded smartphones, allowing it to produce devices for other non-Vivo brands. With this move, Dixon is set to increase its annual production capacity, currently at 50 million smartphones, capturing around 40-45% of the outsourcing opportunity in India. Additionally, with the inclusion of Vivo, Dixon now has partnerships with all major Android smartphone brands.
Outlook
Dixon Technologies is expected to capitalize on the ongoing trend of mobile manufacturing localization in India, regardless of shifting market share dynamics among smartphone brands. The strong growth potential, coupled with anticipated margin expansion, is projected to boost Dixon’s Return on Capital Employed (RoCE) from the current 28.2% to an impressive 46.4% by FY27.
