Tata Motors PV May Have A Clear Runway For Next 3-4 Quarters; JLR Rebound Likely: Kivah Advisors

Summary

Mitun Apad, managing partner at KA Advisors, shares his insights on the 2026 market outlook, with expectations of 10-20% returns. He discusses the growth prospects of Dixon Technologies, highlighting its mobile manufacturing business and expansion into IT hardware, predicting significant revenue growth. Apad also mentions opportunities in Tata Motors' passenger vehicles and potential rebounds in the JLR business. Lastly, he suggests that large-cap IT stocks, despite underperforming in 2025, offer stable returns through dividends and could be a defensive bet for 2026.

Takeaways

• 😀 Dixon Electronics has shown tremendous growth, especially in the mobile business, and is set for further growth in the coming years.
• 😀 Despite a consolidation phase this year, Dixon is expected to ramp up its growth, aiming for 60 million mobiles this year and expanding into camera and display technology.
• 😀 Dixon is well-positioned in the IT hardware space, with government support for manufacturing IT products in India and key partnerships with OEMs.
• 😀 Amber, another large player in the electronics manufacturing space, faces volatility due to a heavy reliance on air conditioners, which can impact its stock performance.
• 😀 Dixon is targeting revenue of 1 lakh crores and margins of 4.5% to 5% over the next 2-3 years, making it an attractive investment if viewed with a 1-2 year horizon.
• 😀 Tata Motors' passenger vehicle division, despite challenges with the JLR business, is expected to recover and benefit from new EV models launching in 2026.
• 😀 The JLR cyberattack issue seems to be resolved, and Tata Motors’ passenger vehicles business is seeing growth, especially in the domestic market.
• 😀 Large-cap IT companies, despite lagging behind global peers in 2025, present a solid opportunity for a defensive, valuation-based investment strategy in 2026.
• 😀 IT companies are currently yielding 4-4.5% dividends, offering potential for double-digit returns over the next year, though stellar growth is not anticipated.
• 😀 The real estate sector, along with the IT sector, underperformed in 2025, but could offer opportunities moving forward, particularly if valuations become more attractive.

Q & A

What is the expected return range for 2026 according to the poll?

The majority of the responses from the poll indicated that people expect returns in the range of 10% to 20% for 2026.

What is Mitun Apad's big call for the year regarding Dixon?

Mitun Apad believes that Dixon has corrected enough, and the company could see growth from here on. He points out that the electronics manufacturing sector has shown significant growth, with Dixon leading in mobile business expansion.

What growth trajectory does Dixon have in the mobile sector according to Mitun?

Mitun predicts Dixon will manufacture approximately 60 million mobiles this year, with continued growth expected over the next few years. Additionally, the company plans to integrate into camera and display technologies.

How does Mitun compare Dixon with its peers like Amber?

Mitun notes that while Dixon's competitors, like Amber, are significant players, Dixon's focus on mobile and IT hardware offers a more promising long-term outlook. Amber, on the other hand, faces more volatility, especially tied to air conditioning volume fluctuations.

What revenue and margin goals has Dixon set for the near future?

Dixon's stated guidance indicates that revenues could reach about 1 lakh crores with a margin range of 4.5% to 5%, marking significant growth from the current 50,000 crores.

How does Dixon's market valuation compare with its projected growth?

Mitun believes that Dixon's current market cap, around 70,000 crores, doesn't seem expensive when considering its projected revenue growth to 1 lakh crores and its potential EBITDA of around 5,000 crores over the next couple of years.

What other stocks does Mitun recommend as potential bets?

Mitun mentions Tata Motors' passenger vehicle division as a potential contra bet. Despite the challenges faced by the JLR business due to a cyber attack, the division shows promise for a rebound, especially with upcoming electric vehicle launches in 2026.

What is Mitun's view on the IT sector for 2026?

Mitun suggests that the large-cap IT sector could be a defensive play for 2026. He emphasizes that these companies offer attractive dividend yields of about 4-4.5%, making them a good investment for double-digit returns without too much volatility.

Why does Mitun believe the large-cap IT sector could provide steady returns?

Mitun highlights that large-cap IT companies are offering relatively high dividend yields, which could result in steady returns even if the sector doesn't experience stellar growth in 2026. The focus is on defensive, value-oriented investing in this space.

What sectors does Mitun believe could be undervalued or overlooked at the moment?

Mitun mentions the real estate sector, noting that it has underperformed in 2025, making it a potential area for value investing in 2026, especially with the two key laggards of 2025 being real estate and IT.