Why are shares of Dixon Technologies, CG Power and peers witnessing a sharp fall?

Shares of Dixon Technologies Ltd. are trading with losses of close to 8% on Wednesday, January 8. Along with Dixon, shares of other Electronic Manufacturing Companies like Kaynes Tech, PG Electroplast, CG power are also trading with losses of between 4% to 8% on Wednesday.

The fall in these shares comes after the Tata Group on Tuesday announced that it will be investing $18 billion in the field of electronics and semiconductors and will open nine new factories in the next two years.

Tata Group Chairman N Chandrasekaran called this field a “long game”.

Shares of Dixon are among the biggest losers within the broader markets in Wednesday’s trading session. The stock has declined in two out of the last three trading sessions.

Last week, Dixon was highlighted as the top pick by Nomura in the Electronics Manufacturing Services (EMS) segment.

The brokerage said that Dixon has the potential to test levels of ₹22,256, which is the highest price target on the stock on the street.

Dixon is likely to be a key beneficiary of a 55% year-on-year jump in mobile exports to $26 billion by financial year 2026, according to Nomura.

Out of the 31 analysts that have coverage on Dixon Technologies, 15 of them have a “buy” rating, nine of them say “hold”, while the other seven have a “hold” rating.

Shares of Dixon Technologies are trading 7.1% lower at ₹17,122, while those of CG Power are down 4.8% at ₹684.2. Shares of Kaynes Tech too are trading 4.5% lower on Wednesday at ₹6,923. It must be noted that these shares have seen significant moves on the upside over the last 12 months. Dixon was up 180% in 2024, while those of Kaynes Tech had also seen gains of over 150%.