Noida-based hardware manufacturer Dixon Technologies has acquired a mega manufacturing contract with American computer giant HP. The manufacturing will be done at Dixon’s unit at Oragadam, outside Chennai.

Dixon Technologies already maintains a significant grasp on the IT hardware market of India. Earlier they had signed a partnership deal with Lenovo and Acer. They are producing Laptops for Acer now, preparing to begin Lenovo production and aim to start production for HP in April of FY26.

"The order from HP is a prestigious one and will help strengthen the Make in India initiative and Atmanirbhar Bharat programme," said chairman Sunil Vachani.

Dixon shares have skyrocketed this year, outperforming the broader market by a large margin. However, it needs to scale up its operation while keeping the return ratio in check. Dixon will make laptops and desktops for HP under the IT hardware production linked incentive scheme. Under this scheme, a higher capex requirement is likely to create short-term pressure on return ratios. Dixon is likely to invest 250 crores for the project. However, it is not clear how much of the computer HP will make in India and how much it will import.

For HP, the deal shows its commitment to India and its localization efforts. They have made their intent clear to manufacture in India, as the Indian IT hardware market grows rapidly.

"I believe the PLI scheme has been a great enabler. We are participating in it because it creates a bridge for the development of the sector from a manufacturing perspective. We are quite bullish that the ecosystem will develop over the next few years, and that too pretty quickly. In the intervening period, the PLI is a solid programme. I think the starting point has been a very measured and a strong initiative by govt," told Ipsita Dasgupta, MD of HP in India while speaking to TOI.