Analyst's Diary: Too hot to handle

The fast-growing Indian electronics manufacturing services (EMS) industry continues to be in the limelight owing to its high-growth potential. The government's policy support and the 'China plus one' trend have further cemented its growth expectations. Among the listed domestic players in the EMS industry, Dixon Technologies has outpaced the rest. The electronics contract manufacturer has maintained better returns on capital and cash conversion when compared to peers. It has grown its revenue and profit after tax by 10 times since FY16 as of December 2023 (TTM basis). Naturally, this is reflected in the company's stock price, which has generated strong annual returns of 49 per cent since listing. But something caught our eye in the latest concall. It was the management's confidence in achieving an ambitious revenue growth of 35-40 per c