Semiconductors are like the brains of electronic devices. With the increase in demand for electronic devices, the demand for semiconductors is also increasing. Even the Indian Government is launching several initiatives to promote semiconductor production. Recently, in March 2024, they approved a US$ 15.2 billion investment in three semiconductor plants.
The demand and the Government’s support are ultimately making semiconductor stocks popular amongst investors. In this article, learn about the best semiconductor stocks in India (based on market cap).
Semiconductor stocks are shares of companies engaged in the manufacturing and marketing of semiconductors. These are small electrical chips that are critical for electronic devices. It is used to manage the flow of electricity on a wide range of electronic products, home appliances, smartphones, ATMs, electric cars, and others.
| Name | Market Cap (₹ in crore) | 5Y CAGR (%) | 1Y Return (%) |
| HCL Technologies Ltd | 3,64,278.88 | 20.46 | 20.62 |
| Vedanta Ltd | 1,70,976.94 | 21.82 | 51.47 |
| Dixon Technologies (India) Ltd | 55,623.32 | 79.35 | 144.74 |
| Tata Elxsi Ltd | 45,928.56 | 52.57 | -2.34 |
| Moschip Technologies Ltd | 2,590.76 | 48.10 | 114.42 |
| ASM Technologies Ltd | 1,259.95 | 86.86 | 124.99 |
| Solex Energy Ltd | 1,218.12 | 124.87 | 261.77 |
| MIC Electronics Ltd | 1,199.13 | – | 176.24 |
| RIR Power Electronics Ltd | 1,176.75 | 109.82 | 337.94 |
| SPEL Semiconductor Ltd | 620.28 | 84.60 | 210.18 |
Note: The 10 best semiconductor stocks list in India listed here are as of May 29, 2024. They are sorted as per the market capitalisation.
HCL Technologies is an India-based multinational technology company operating in three business segments: IT and Business services, Engineering and R&D services, Products and Platforms.
HCL Technologies is one of the major players in the semiconductor industry, acting as an engineering partner for manufacturers. They provide a wide range of services across the chip creation process, from design assistance to testing and obsolescence management.
The net profit margin of the company is 14.09% and the Return on Equity (ROE) is 23.31%.
Vedanta is a diversified natural resource company that operates across segments: copper, aluminium, iron ore, power, lead, gas, etc.
The company’s subsidiary company, Vedanta Semiconductors Private Limited (VSPL) intends to establish a semiconductor fab and manufacture semiconductor chips, which will serve various applications including mobile devices, consumer electronics, automotive systems, and network equipment.
Vedanta’s net profit margin is 2.84% and the ROE is 16.01%.
The third company on the list, Dixon Technologies, is a home-grown manufacturing company. It provides electronic manufacturing services (EMS) to various industries, including electronics, home appliances, lighting products, mobile phones, and others.
The company’s net profit margin is 2.07%, and the ROE is 22.31%.
The company operates in two segments – system integration and support and software development and services. Tata Elxsi, a global leader in technology design and services, has paired with Renesas Electronics Corporation, a pioneer in advanced semiconductor solutions, to develop a state-of-the-art design centre in Bangalore.
The net profit margin of Tata Elxsi is 21.56%, and the ROE is 40.97%.
The India-based company is a fabless model semiconductor and Internet of Things/Everything (IoT/E) focused manufacturer. They specialise in product design and development services, including chip design and system development.
The net profit margin of the company is 3.33%, and the ROE is 6.95%.
The Indian semiconductor industry is enjoying considerable traction as the demand for semiconductors has increased. The Indian Government launched the ‘Semicon India Program’ in December 2021 to develop the Semiconductor and Display Manufacturing Ecosystem in India.
In March 2024, the Government approved a huge US$15.2 billion (₹1.26 trillion) investment in three semiconductor plants, signifying the country’s technological progress.
The semiconductor market in India is expected to reach $80.3 billion by 2028. This growth can be attributed to factors such as the rising penetration of smartphones, tablets, and other electronics and increasing data consumption.
As the semiconductor market expands, more job opportunities will be created in the economy.
Currently, the semiconductor industry is one of the most popular industries in India, with major developments. Government initiatives and new investments can help to develop and strengthen the semiconductor manufacturing ecosystem in India. If you want to explore any of these stocks, you can open a demat account with Angel One.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.
The top 5 semiconductor stocks in India as per the market capitalisation are HCL Technologies Ltd, Vedanta Ltd, Dixon Technologies (India) Ltd, Tata Elxsi Ltd and Moschip Technologies Ltd. The list is as of May 29, 2024.
Semiconductor companies are essential to the modern world, producing the tiny chips that power everything from our smartphones to our cars. As technology advances, demand for semiconductors is expected to grow, making semiconductor stocks a potentially lucrative investment. However, talk to your financial advisor before making a decision.
Semiconductor stocks can be a good investment for people with a long-term investment horizon and a high-risk tolerance. The industry is volatile, but it is also expected to grow significantly in the coming years. However, analyse your risk appetite and investment objective before making a decision.
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