Dixon Tech Subsidiary Signs MoU With HP India
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00:00The other big story this morning is Dixon Technologies and Atul Lal, MD is joining us
00:04now on the phone line.
00:05Mr. Lal, a very good morning to you and great to hear about the MOU with HP under the PLI
00:142.0.
00:15Please do add more details on why this is significant, what kind of a revenue contribution
00:20it would have and what else can you tell us about it?
00:24So HP is an elite position as far as the market share is concerned and for Dixon IT products
00:35domain is going to be the next trigger of growth wherein we are setting up a new campus
00:41in January.
00:42In the first phase investment is going to be 250 crores, we are going to employ around
00:471500 people, the capacity is going to be 2 million notebooks, we are going to add to
00:52it PCs and all-in-ones and data servers.
00:57So for us it's a very big agreement, we are targeting to start production sometime in
01:04Q4 of the current financial.
01:06So for us it's a big agreement, the exact numbers are being worked out about volumes
01:11and all.
01:12We are committed to make this success under IIT PLI 2.0 of the Government of India.
01:21Some of the notes say that this is the third largest client for you and the ambitions are
01:25big.
01:26Do these ambitions start showing on the numbers starting FY26 itself?
01:32Is that the plan?
01:33So we already have top four largest global brands in our customer portfolio.
01:41HP is a big one and we are targeting to achieve almost 3.5 to 3.5 crores in FY26 itself.
01:51And over a period of six years we have committed in IIT PLI 2.0 to the Government is 48,000
01:56crores of revenue.
01:57So as I was sharing, it's going to be a large product category for us.
02:05Mr Lal, so the agreement, I mean the numbers of course, I mean this helps you in the numbers
02:11per se for FY26 as you said, the number that you mentioned.
02:17What happens with such big clients, I mean now that you've gotten into let's say this
02:20one for HP for this, is it, it's not technically just a foot in the door, you've actually barged
02:26into the door.
02:27Do you expand that further immediately?
02:30How does this typically work?
02:31What's been the past experience with other clients?
02:33And therefore, could that be the template for HP as well?
02:36So in EMS industry, we are subservient to our principles.
02:45Always the focus is to create value for our customers.
02:49This is our first large relationship with HP and we are committed to create value for
02:56them.
02:57And once we do that, we're very confident that the relationship is going to deepen and
03:02expand.
03:03This is what has happened with our other large global brands, which are our customers, over
03:09a period of time, their share of wallet with Dixon has expanded.
03:14So we are committed to HP and we're really thankful to them for giving us this very major
03:21opportunity and we're going to be creating value for them.
03:24And then we're going to get back to them for expanding our business.
03:27Hi Atul, it's also Samina joining in.
03:30Good morning.
03:31Hi Sam.
03:32Hi.
03:33Just a quick one.
03:34Asa and Lenovo are also significant clients for Dixon.
03:39What is the revenue that both of these contribute to your top line?
03:46So IT products is, we have already been doing with Asa for almost a couple of years now.
03:53Lenovo production is going to start shortly.
03:56As I shared with you a bit earlier, that we're targeting almost three, three and a half on
04:02growth of revenue.
04:03In our IT product category, in the forthcoming financial, that's 25, 26, it's going to take
04:09a year or so, year, year and a half to ramp it up.
04:12So the major jump I see is going to come from 26, 27.
04:19So Mr. Lal, out of the 3,500 crores that you're targeting from this segment, how much would
04:25come in from HP?
04:27Just try to gauge the size of this compared to what is already in the works.
04:32It's slightly early.
04:33The numbers are being worked out, MOU has been signed, definitive agreement is being
04:36worked upon.
04:37We presented the agreement, the MOU and signed the MOU in front of the Honorable Minister.
04:44So those numbers have been worked out and we're going to come back to you on that shortly.
04:48By when, is that also something that is in the works, the timeline and by when we would
04:54see all of this accruing?
04:58So we have committed to HP that we're going to start production sometime in Q4 of the
05:03current financial.
05:04Exact volumes, capacity allocation, numbers, models, all those details are in works.
05:13And in Q1 FY26, you're looking at two more brands on board, if I'm not mistaken, is that
05:19right?
05:20So with HP, we already have three brands in our customer portfolio.
05:25So if our fourth brand is almost confirmed, we should be signing up with them shortly.
05:29So we have four of the largest global brands as our customers in this particular product
05:34category now.
05:36Looking forward to hearing about that as well.
05:38Thank you so much for speaking with us this morning.
05:41Atul Lal, MD of Dixon Technology is talking about the MOU that they've signed with HP
05:52and that's the big one.