Dixon Technologies, an electronics manufacturing services provider, reported a 36% year-on-year decline in net profits, totaling ₹298 crore for the quarter ending March 2026. Despite this drop, the company's quarterly revenue grew by 3% to ₹10,595 crore. The management attributed the profit decline to a sluggish market environment characterized by geopolitical tensions, soft consumer demand, and inventory rationalization by customers. Additionally, rising component costs, particularly for memory chips and semiconductor inputs, contributed to a 170 basis point decrease in profit margins, which fell to 2.8%. Atul Lall, vice chairman and managing director, explained that while increased component costs inflate overall revenue, they negatively impact profit margins. The conclusion of the production-linked incentive scheme in March 2026 further pressured margins. Looking ahead, Dixon anticipates flat revenues from domestic handset production but expects significant growth in average selling prices. The company is also in advanced stages of a joint venture with Vivo to manufacture smartphones, potentially adding 20-22 million units annually. Furthermore, Dixon aims to diversify its portfolio by entering the specialty industrial electronics manufacturing services sector, targeting revenues of ₹3,000-4,000 crore. The company expects a three-fold increase in revenues from IT hardware production and significant growth in telecom equipment manufacturing, projecting FY27 revenues to exceed ₹56,000 crore.