As technology rapidly evolves, the semiconductor industry stands at the core of almost every innovation, powering everything from smartphones to electric vehicles. For investors, semiconductor stocks might just offer a golden opportunity for growth.
With the Indian government backing this sector through subsidies and attracting global investments, the semiconductor sector could be set for a major boom. Here we discuss some of the popular semiconductor company stocks that you can consider for your portfolio.
Top Indian Semiconductor Stocks to Watch
Semiconductors are the “brains” behind modern technology, and they are found in devices ranging from laptops to renewable energy solutions. Their role in artificial intelligence (AI), Internet of Things (IoT), automotive tech, and 5G communications is especially critical as these technologies expand globally and in India.
The semiconductor market in India is expected to grow to $63 billion by 2026, driven by increasing demand for advanced technology products.
Many Indian companies are becoming key players in the semiconductor market, either through direct manufacturing or supporting the supply chain. Here are a few semiconductor stocks you should consider:
1. Tata Elxsi (TATAELXSI)
Known for its engineering expertise, Tata Elxsi provides software and technology solutions for semiconductors used in the automotive and healthcare sectors. Recent collaborations, like one with Nidec for vehicle tech, solidify its role in this market.
The company reported a revenue of ₹3,552.1 crores in FY24, up by 13% from the previous year. Tata Elxsi’s PAT also stood at ₹792.2 crores in FY24, with a YoY growth of 4.9%.
2. Dixon Technologies (DIXON)
Dixon Technologies is an electronics manufacturer and a leader in the electronic manufacturing services (EMS) industry in India. The company is well-known for assembling and designing semiconductor-based products and it is going to play a major role in the growth of this industry.
Dixon Technologies recorded a consolidated revenue of ₹17,713 crores in FY24, a YoY growth of 45%. The company also reported an EBITDA of ₹720 crores and PAT of ₹375 crores in FY24.
3. Havells India (HAVELLS)
A household name in the electronics sector, Havells focuses on developing power and electrical distribution equipment. It manufactures products like electrical consumer durables, switchgear, lighting and fixtures, and cables, among others.
With 20 product lines and a net worth of ₹7,438 crores, Havells India reported a revenue of ₹18,550 crores and PAT of ₹1,273 crores in FY24.
4. Polycab India (POLYCAB)
Known for manufacturing and selling wires and cables, Polycab also operates in the International Business and produces advanced solutions for the semiconductor and fast-moving electrical goods (FMEG) segments. With a presence in over 70 countries across the world, the company provides energy-efficient, innovative, and safe products to its customers.
With a YoY growth of 28%, PIL reported a revenue of ₹180,394 million in FY24. The company’s EBITDA margin stood at 13.8% and PAT stood at ₹18,029 million.
5. Bharat Electronics (BEL)
A prominent government-owned enterprise, BEL is integral to India’s semiconductor ecosystem, producing components for defense and telecommunications. It is one of the 16 PSUs under the Ministry of Defence of our country.
With its government backing and focus on indigenous production, BEL recorded a consolidated revenue from operations of ₹20,169 crores in FY24. Bharat Electronics share price at present is trading around ₹280+.
Why Consider the Semiconductor Sector?
Here are the top reasons why the semiconductor sector can supercharge your portfolio.
Government Support for India’s Semiconductor Industry
The Indian government is actively encouraging semiconductor manufacturing through initiatives like the “Semicon India” program, which provides subsidies and incentives to domestic and international players.
The government has also set up the Semiconductor Fabs Incentive Scheme (SFMIS) of $10 billion with an aim to attract semiconductor manufacturers. Major global companies like Micron and Taiwan’s Powerchip Semiconductor Manufacturing Corporation (PSMC) are setting up large-scale manufacturing units in India with government backing.
With support for infrastructure, such as advanced packaging facilities in states like Gujarat and Assam, India aims to become a global semiconductor hub, reducing its dependence on imports. This strategic move aligns with India’s “Make in India” mission, which supports self-reliance in critical industries.
Technological Advancements in the Semiconductor Sector
Indian semiconductor companies are investing heavily in research and development to improve their technological capabilities.
For instance, Tata Elxsi’s efforts in IoT, AI, and mobility show its dedication to staying at the forefront of semiconductor innovation. Similarly, Dixon Technologies’ recent expansion into Android TVs and healthcare devices reflects its adaptability to new tech trends.
These advancements are crucial as the global semiconductor landscape faces shifts in demand for specialized chips, like those used in AI processing and electric vehicles.
Companies leveraging such trends are likely to benefit significantly in the long term, positioning themselves as key players in India’s tech-driven economy.
Future Trends: What’s Next for Semiconductor Stocks?
Looking forward, the semiconductor industry is set to be shaped by several key trends:
5G and IoT Growth: The rollout of 5G in India and the expansion of IoT networks are expected to drive demand for semiconductor components in devices and infrastructure.
Electric Vehicles (EVs): With growing interest in EVs, chips tailored for automotive applications will see a surge, creating opportunities for companies that develop specialized chips.
AI and Data Centers: With rising demand for AI-powered solutions and cloud computing, semiconductor companies focused on advanced computing capabilities will be critical to support this growth.
Global Supply Chain Shifts: Geopolitical tensions and the need for supply chain diversification are leading countries to reduce reliance on China for semiconductor production. India’s initiatives to attract semiconductor manufacturing can play a big role here, particularly as global companies look to expand in stable, emerging markets like India.
Conclusion
For investors looking at the semiconductor sector, the growth potential in India’s tech industry offers an attractive opportunity. Government backing, rising domestic demand, and a supportive regulatory environment create a promising opportunity. However, investing in semiconductor stocks requires a long-term view as this is a capital-intensive industry with high research and development costs.
With clear upward growth and government support, semiconductor stocks could indeed be a powerful addition to your diversified portfolio. Remember to consider your own risk tolerance and research each stock’s performance history and financial health.
