This smallcap stock has surged 78% in 2 months; zoomed over 360% in 2 years

D-Link (India) hit a record high of Rs 556.75, as they rallied 17 per cent on the BSE in Wednesday's intra-day trade amid heavy volumes on healthy outlook.

Shares of D-Link India hit a record high of Rs 556.75, rallying 17 per cent on the BSE in Wednesday’s intra-day trade amid heavy volumes on its healthy outlook.

In the past two months, the stock of computers hardware and equipment company has surged 78 per cent as the company on May 11 announced dividend of Rs 13 per share, including a special dividend of Rs 5 per share.  The stock will turn ex-date for special and interim dividend on July 12, 2024.

Thus far in the financial year 2024-25 (FY25), the stock of smallcap company has doubled from levels of Rs 274. In past two years, it has zoomed 364 per cent from level of Rs 120 on the BSE.

 

At 10:05 am; D-Link was trading 16 per cent higher at Rs 553.05, as compared to 0.7 per cent rise in the BSE Sensex. The average trading volumes on the counter jumped nearly two-fold, with a combined 3.2 million shares changing hands on the NSE and BSE.

D-Link India is a part of D-Link Corporation of Taiwan and is one of the largest networking companies in India. The company is engaged in the marketing and distribution of networking products in India and SAARC region.

The Indian government is taking several initiatives to promote the growth of the IT hardware industry in the country. These initiatives include the production-linked incentive (PLI) scheme, the National Manufacturing Policy, and the Startup India initiative. These initiatives are expected to provide a boost to the growth of the Indian IT hardware industry by attracting investments, creating jobs, and boosting exports.

The Indian IT hardware industry is also expected to benefit from the growth of new technologies such as artificial intelligence (AI), cloud computing, and the Internet of Things (IoT). These technologies are expected to create new demand for IT hardware products and services.

D-Link India is a principal player in the small office home office and small and medium business segment, closely aligned with system integrators. In parallel, the company also targets other key verticals, including government, education, BFSI and manufacturing, among others.

According to IDC Report, the Ethernet Switch, Router, and WLAN markets are expected to grow in single digits in terms of compound annual growth rate (CAGR) for 2021–2026. Increased adoption of emerging technologies such as cloud, IoT, mobility, etc. would drive incremental revenues. IDC also expects large investments for 5G rollouts in the next couple of years.

The India router market is expected to grow at a healthy pace with a CAGR of 9.20 per cent from 2023 to 2028. The growth of the market is driven by a number of factors, including the increasing demand for high-speed internet, the growing number of connected devices, and the increasing adoption of smart homes and businesses.

The WLAN market in India is growing rapidly, with a CAGR of 20.2 per cent expected in the next few years and is being driven by the need for secure wireless connectivity and increasing adoption of new technologies such as Wi-Fi 6 and Wi-Fi 6E.

D-Link India in its FY23 annual report had said the company is strongly focusing on local products as part of its ‘Make in India’ initiative. “Make in India,” and localisation of products are two important initiatives of the Indian government that are closely linked.

The future of the structured cabling market in India is bright. The market is expected to continue to grow at a rapid pace in the coming years, driven by the increasing demand for higher bandwidths, the rapid digitisation of the economy, and the government’s focus on infrastructure development.

D-Link offers a wide range of structured cabling products, components, and services and is one of the major players in the Indian structured cabling market. The company maintains a substantial market share in the consumer wireless and switching sectors.