China’s Supply Chain Worries, Increasing Wealth of Indian Investors

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The stock prices of Dixon Technologies have surged over 80 per cent during the last one year. Similarly the stocks of Amber Enterprises have surged over 37 per cent

China is facing a lot of troubles in the supply chain running in, and out of the country. The country was also reported to be going through a rough phase in electronic components manufacturing due to the shortage of power supply.

A report by LiveMint notes that the crisis in China might be resulting into the increased evaluation of India-based electronic companies like Dixon Technologies and Amber Enterprises. While the former is an electronics part maker, and an contract manufacturer for the likes of Samsung, the latter supplies electronic parts, used in ACs, to the likes of LG.

Dixon Technologies stock prices, during the last one year, have surged more than 80 per cent, providing handsome returns to the investors. Similarly, the prices of Amber Enterprises have surged more than 37 per cent.

The report mentions this to be a possible indicator of the confidence investors are gaining in India as a alternate to the manufacturing power of China. India’s neighbor, as a matter of fact, is currently under dark clouds owing to energy crisis, zero-covid policy, tensions with Washington, and several other reasons.

The government of India, on the other hand, has also launched Production Linked Incentive Schemes worth over Rs 90,000 cr for promoting electronics manufacturing in the country. India, as it country, is steadily becoming the largest market for electronics in the world.

Though the stock fell recently, Dixon’s stock is trading close to 75 times its 12-month forward earnings estimate, while Amber is trading at about 48 times, as reported by Bloomberg.

It is also worth mentioning here that a lot of Indian companies still depend on Chine for sourcing a large part of components they use in manufacturing/assembling electronics. As a matter of fact the country imports close to 75 per cent of components from China.

Power Crisis in China May Lead to Component Crisis in India

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