Dixon Technologies has outlined an ambitious expansion strategy that marks a decisive shift beyond its traditional electronics manufacturing services (EMS) role. By stepping deeper into component manufacturing, the company aims to strengthen its position across the electronics value chain while improving long-term profitability and localisation.
During its Q2 FY26 earnings conference call, management announced that the company has filed multiple applications under the government’s Electronics Components Manufacturing Scheme (ECMS). Through these applications, the company has committed investments of nearly ₹3,000 crore over the next three years. These funds will support the manufacturing of display modules, camera module enclosures, lithium-ion batteries, optical transceivers (SFPs), and mechanical enclosures. As a result, the company is moving steadily toward backward integration, a strategy that reduces reliance on imported parts and increases value capture.
Moreover, management emphasised that component manufacturing represents the next phase of growth for the company. By internalising critical components, the firm expects to improve supply chain resilience and support margin expansion over the medium to long term. At the same time, this approach aligns with India’s broader push to build a self-reliant electronics manufacturing ecosystem.
A central pillar of this strategy focuses on display manufacturing. To achieve this, the company has entered into a 74:26 joint venture with HKC to establish display module production in India. Initially, the joint venture will create capacity for 24 million smartphone display units per year and 2 million notebook display units, largely for captive consumption. Subsequently, the second phase will expand capacity to 60 million smartphone displays annually. In addition, the plan includes displays for LED televisions and automotive applications. Notably, management indicated that display manufacturing could deliver margins in the higher double digits, thereby strengthening overall profitability.
Alongside displays, the company has expanded into camera module manufacturing after acquiring a 51% stake in Kunshan Q Tech Microelectronics (India) Private Limited. Through this acquisition, the firm entered the manufacturing and supply of camera and fingerprint modules. These components cater to smartphones, IoT devices, and automotive applications.
Moreover, management plans fresh investments over the next six to nine months. These funds will support capacity expansion and deeper localisation. As a result, smartphone camera module volumes are expected to rise sharply over the next two to three years as production scales up.
In parallel, lithium-ion batteries represent another key focus under the ECMS applications. Although management has not shared detailed capacity plans, it confirmed that battery manufacturing fits into the long-term integration roadmap. Therefore, this move supports India’s objective of localising critical electronics components. At the same time, it broadens the company’s overall manufacturing footprint.
Additionally, the backward integration strategy strengthens the company’s growing presence in automotive electronics. Management stated that the firm will increasingly target automotive displays and camera modules. These efforts will leverage expertise developed in smartphones and consumer electronics. Consequently, the company aims to expand into higher-value automotive applications.
Meanwhile, this strategic expansion coincides with strong financial performance. In Q2 FY26, consolidated adjusted revenues grew 29% year-on-year. During the same period, adjusted EBITDA increased by 34%. This growth came despite temporary demand disruptions caused by GST-related changes. Overall, management remains optimistic about medium- and long-term growth prospects.
Finally, as component investments gather pace, Dixon Technologies is positioning itself to move up the value chain, deepen localisation. And play a larger role in India’s evolving electronics manufacturing landscape.
