Best Semiconductor Stocks For Feb 2025: CG Power & Industrial Solutions, RIR Power, Dixon Technologies and More- Based on 5Y CAGR

The semiconductor industry is crucial for economic growth in today’s technology-driven world. In 2024, India’s semiconductor sector reached a significant milestone with the government approving the establishment of the first semiconductor fabrication plant in Dholera, Gujarat. This plant will be developed in partnership with Tata Electronics, a subsidiary of Tata Group, and Taiwan’s Powerchip Semiconductor Manufacturing Corp (PSMC), with an investment of ₹91,000 crore.

The semiconductor industry has seen investments totalling ₹1.26 lakh crore, including a packaging unit approved last year for US-based Micron Technology in Gujarat. Additionally, this year, the government also approved a ₹3,300 crore semiconductor unit proposal by Kaynes Semicon in Sanand, Gujarat. In this blog, let’s explore the best semiconductor stocks for February 2025 based on 5Y CAGR.

Overview of the Semiconductor Conductor Industry in India

Looking ahead, India’s semiconductor market is projected to grow significantly, reaching $100.2 billion by 2032. This growth is driven by rising demand for consumer electronics, automotive applications, and the government’s push for self-reliance in semiconductor production. New opportunities are emerging in areas like artificial intelligence, 5G, the Internet of Things, and quantum computing, all of which offer exciting potential for innovation. To fully unlock this potential, India needs a strong policy framework, improved infrastructure, and a supportive environment for both domestic and global players.

Best Semiconductor Stock Based on 5Y CAGR

Note: The best semiconductor stocks have been sorted based on 5Y CAGR as of January 27, 2025. 

Overview of 5 Best Semiconductor Stocks

1. CG Power & Industrial Solutions

CG Power & Industrial Solutions is a global company that provides complete solutions for managing and using electrical energy efficiently and sustainably. It serves utilities, industries, and consumers with a wide range of products, services, and solutions. The company operates in two main areas: Power Systems and Industrial Systems.

In September 2024, CG Power & Industrial Solutions reported a revenue of ₹2,270.19 crore and a net profit of ₹222.57 crore, compared to ₹2,106.41 crore revenue and ₹232.13 crore net profit in June 2024. 

Key metrics: 

• Earning per share (EPS): ₹5.96
• Return on equity (ROE): 24.47%

2. RIR Power Electronics Ltd

RIR Power Electronics Ltd specializes in producing traditional semiconductor devices, including bridges, power modules, diodes, rectifiers, and thyristors. The company has also developed high-power semiconductor devices capable of handling up to 9,000 volts and 6,000 amperes.

In September 2024, the company recorded a revenue of ₹18.82 crore and a net profit of ₹1.53 crore, compared to ₹21.05 crore and ₹2.83 crore in June 2024. For FY23-24, the total revenue was ₹66.76 crore, with a net profit of ₹7.96 crore.

Key metrics: 

• EPS: ₹11.42
• ROE: 9.31%

3. Dixon Technologies (India) Limited

Dixon Technologies (India) Limited produces various electronic products, such as consumer electronics, lighting, home appliances, CCTV cameras, and mobile phones. The company has signed a binding agreement with vivo Mobile India Private Limited to form a joint venture for manufacturing electronic devices, including smartphones, as an OEM.

In December 2024, Dixon Technologies reported revenue of ₹1,030.46 crore and a net profit of ₹2.50 crore, compared to ₹1,986.16 crore in revenue and ₹256.82 crore in net profit in September 2024.

Key metrics: 

• EPS: ₹55.07
• ROE: 19.60%

4. Bharat Electronics Ltd

Established in 1954, Bharat Electronics Ltd focuses on producing and providing electronic equipment and systems primarily for the defense sector. The company also caters to the civilian market on a smaller scale.

In Q2 FY24 (Sep 2024), Bharat Electronics Ltd reported revenue of ₹4,583.41 crore and a net profit of ₹1,091.27 crore, compared to ₹4,198.77 crore revenue and ₹776.14 crore profit in Q1 FY24. 

Key metrics: 

• EPS: ₹6.22
• ROE: 26.12%

5. Tata Elxsi

Tata Elxsi provides comprehensive services, including research, strategy, electronics, mechanical design, software development, testing, and implementation. Recently, Suzuki Motor Corporation and Tata Elxsi launched the ‘SUZUKI-TATA ELXSI Offshore Development Center’ in Pune, India. This specialised facility will drive Suzuki’s advanced engineering projects and support innovations shaping the future of mobility.

For the quarter ending December 2024, the company reported revenue of ₹939.17 crore, slightly lower than ₹955.09 crore in September 2024. The net profit for the quarter stood at ₹199.01 crore, compared to ₹229.43 crore in the previous quarter. 

Key metrics: 

• EPS: ₹129.96
• ROE: 32.55%

Best Semiconductor Stock Based on Market Cap

Note: The best semiconductor stocks have been sorted based on Market cap as of January 27, 2025. 

Best Semiconductor Stock Based on Net Profit Margin

Note: The best semiconductor stocks have been sorted based on net profit margin as of January 27, 2025. 

Things to Keep in Mind When Investing in Semiconductor Stocks in India

Before investing in semiconductor stocks in India, it’s important to consider a few key factors:

• Market Demand and Growth Potential 

Look at the demand for semiconductors across industries like consumer electronics, automotive, telecommunications, and industrial sectors. With India’s growing digitalisation, smart devices, and IoT market, semiconductor companies have strong growth potential.

• Government Support and Policy 

Government initiatives, such as India’s Semiconductor Mission, which focuses on boosting local semiconductor manufacturing, can greatly impact the success of companies in this sector. Government incentives and policies can play a big role in their growth.

• Supply Chain and Raw Material Availability 

The semiconductor industry depends on global supply chains for essential raw materials like silicon and specialised equipment. Any disruptions, such as geopolitical tensions or pandemics, can affect production and profits. It’s important to assess how companies handle these risks.

Should You Invest in Semiconductor Stocks?

Investing in semiconductor stocks can offer high returns, but there are some risks to keep in mind.

• High Growth Potential 

The semiconductor industry is expected to grow quickly due to technological advancements in areas like 5G, AI, autonomous vehicles, IoT, and cloud computing. As these technologies grow, the demand for semiconductors will rise, which is good news for companies in this field.

• Essential for Modern Technology 

Semiconductors are vital for all modern electronics, from smartphones to laptops, electric vehicles, and medical devices. As global digitalisation continues, the demand for chips is expected to remain strong.

• Government Support 

Countries like India are investing in the semiconductor sector. India’s Semiconductor Mission aims to increase local manufacturing and reduce reliance on imports, which could benefit local semiconductor companies.

Future Outlook for India’s Semiconductor Industry

India’s semiconductor market is projected to reach $100.2 billion by 2032, driven by increasing demand in consumer electronics, automotive, and government efforts to boost local semiconductor production. Key growth opportunities lie in emerging fields like artificial intelligence, 5G, the Internet of Things, and quantum computing. To tap into this potential, strong investments and partnerships with various stakeholders will be crucial.

The government needs to create a supportive policy framework and infrastructure, fostering a favourable environment for both domestic and international players. Industry leaders must focus on research and development, while educational institutions align their programs with industry needs. A thriving semiconductor ecosystem is essential for India’s economy and its electronics and automobile industries. By reducing import dependence and becoming a global leader, India can drive innovation and stay competitive on the world stage. Collaboration among the government, industry, and academia will be vital to achieving this vision.

Conclusion

Investing in semiconductor stocks offers the potential for strong growth, especially with the increasing demand for technologies like AI, 5G, IoT, and electric vehicles. The semiconductor sector is crucial to global digital progress, and with government support, particularly in countries like India, there is further potential for growth.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.