Elixir Equities’ Dipan Mehta stays positive on IndiGo, sees long-term value in EMS sector, Dixon Tech

Sharing his outlook on InterGlobe Aviation (IndiGo), the electronics manufacturing services (EMS) space, and Dixon Technologies, Dipan Mehta, Director of Elixir Equities, offered a combined disclosure with a clear assessment of risks and long-term fundamentals.On IndiGo, Mehta acknowledged the recent turbulence. He said, “We are shareholders of IndiGo,” adding that he feels the impact of the stock correction and the disruption faced by passengers. According to him, sentiment aside, IndiGo remains the largest player in what he called the fastest-growing aviation market. He highlighted the company’s capacity expansion and said 30% of revenues now come from international routes, which are not affected by the DGCA order. This share is expected to rise to 40% in the next few years.

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Mehta said the core drivers of the business remain intact. He noted that IndiGo posted a net profit of ₹8,168 crore in the fiscal year 2023-24 (FY24) and added, “This company can generate profits of ₹10,000-11,000 crore” in a steady state. At a market cap of ₹1,85,000 crore, he said the stock trades at roughly 18 times its profit potential, which he believes is attractive for a company in India’s travel and tourism ecosystem.He also cautioned that the December and March quarters could be difficult due to operational disruptions and currency pressure. “For every one rupee drop in the rupee against the dollar, they lose about ₹900 crore,” he said. Mehta warned that the stock “is not for the weak-hearted” and could fall further, but reiterated that a three- to five-year horizon can still deliver reasonable returns.

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On the EMS space, Mehta said he does not track Kaynes Technology closely but expects the company to stabilise if its business fundamentals hold and management addresses disclosure concerns. He noted that many companies have recovered from similar governance-linked setbacks when the core franchise remained strong.

For other EMS players like PG Electroplast, Amber Enterprises, and Dixon Technologies, Mehta said valuations have come under scrutiny. He added that investors now question whether they have been “overpaying” despite strong growth. Even so, he remains constructive on the sector and said valuation compression is healthy for long-term investors. Dixon, he disclosed, is one of Elixir Equities’ largest holdings.

On Dixon Tech specifically, Mehta said the stock’s volatility is easier to absorb when the initial buy price is low. He explained that “15-20%” corrections matter far more to investors who entered at higher valuations and are seeing immediate mark-to-market losses.

For the full interview, watch the accompanying video

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