What are semiconductors stocks?
Semiconductor stocks are shares of companies engaged in the manufacturing and marketing of semiconductors. Semiconductors are small electrical chips that are critical for electronic devices. It is used for managing the flow of electricity on a wide range of electronic products, home appliances, smartphones, ATMs, electric cars, and others.
The recent worldwide developments have brought these stocks to the limelight. Despite increasing demand, especially under the pandemic condition and limited supply, semiconductor stocks continue to enjoy popularity. In this article, we will explore the best semiconductors stocks in India and why they might make a lucrative investment.
Before starting, let’s get an industry overview.
Semiconductor industry in India
The Indian semiconductor industry is enjoying a lot of traction as the demand for semiconductors has increased. The global semiconductor and related device market is expected to grow at a CAGR of 4.82% from USD 570.1 billion in 2019 to USD 688.2 billion by 2023, aided by factors like rising penetration of smartphones, tablets, and other electronics and increasing data consumption.
The Indian semiconductor industry is in a growing phase. It is expected to grow at a CAGR of 19.7% from Fiscal 2022 to Fiscal 2026. There is a government effort to make the country self-reliant in producing semiconductors for its expanding market.
There are lucrative investment opportunities in this segment.
- Taiwanese electronic company Foxconn and local conglomerate Vedanta have announced a 19.5 billion dollar fresh investment to boost the industry and set up manufacturing units in Gujarat. It is the largest project announcement so far in this segment.
- India has joined the global force in making semiconductor chips. The government has announced a 10 billion economic package to attract semiconductor manufacturers. Currently, the Asian semiconductor market is controlled by a few countries led by China. India plans to build capacity to fill the niche as some countries and companies are looking for alternatives to China.
- As the semiconductor market expands, it will create more job opportunities in the economy. Vedanta Chairman Anil Agarwal said the project would create around 100,000 jobs in the country.
- According to the ‘India Semiconductor Market Report, 2019-2026’ report, India’s semiconductor component market revenue will increase to USD 300 billion between 2021-2026.
- The global semiconductor market has been volatile for two years due to supply shortages. It will keep the demand for semiconductor companies and their stocks high.
Semiconductor stocks in India
The top semiconductor stocks in India are the following.
|Sl no||Company Name||Market capitalisation in ₹ crore|
|1||Tata Elxsi Ltd||42,515|
|2||ASM Technologies Ltd||594|
|3||Dixon Technologies (India) Ltd||25,809|
|4||SPEL Semiconductor Ltd||245|
|5||Moschip Technologies Ltd||1,057|
|6||Ruttonsha International Rectifier Ltd||216|
|7||HCL Technologies Ltd||2,98, 729|
|8||MIC Electronics Ltd||251|
|9||Surana Telecom and Power Ltd||140|
|11||Solex Energy Ltd||238|
Here is what a portfolio made of top semiconductor stocks in India will look like.
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, in developing a state-of-the-art design centre in Bangalore.
P/E ratio (TTM): 63.46
EPS (TTM): 107.57
Profit in 2022: ₹2.471 crore
ASM Technologies Ltd.
The company offers consulting in engineering, product engineering, and product research and development services. Its services include automation solutions, compromise assessment digital engineering, the internet of things, robotics, and driver assistance systems. They earned a total revenue of Rs 192 crore in 2022.
P/E ratio (TTM): 42.41
EPS (TTM): 11.84
Profit in 2022: ₹14.61 crore
Dixon Technologies (India) Ltd.
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.
P/E ratio (TTM): 112.10
EPS (TTM): 38.79
Profit in 2022: ₹190 crore
SPEL Semiconductor Ltd
Individuals who want to allot a small corpus in semiconductor stocks can buy SPEL Semiconductors stocks under ₹ 100. The company primarily offers integrated circuit (IC) assembly and test facilities, and semiconductor packaging solutions. Last year, the company’s stock price increased by 142.23%.
P/E ratio (TTM): NA
EPS (TTM): -0.41
Profit in 2022: – ₹11.84 crore
Moschip Technologies Ltd.
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.
P/E ratio (TTM): 179.81
EPS (TTM): -0.36
Profit in 2022: – ₹6.45 crore
Ruttonsha International Rectifier Ltd.
The small-cap company’s product category includes semiconductor devices and power equipment. Their semiconductor devices include phase control thyristors, investor-graded thyristors, standard recovery diodes, fast recovery diodes, high voltage modules, and more.
P/E ratio (TTM): 48.00
EPS (TTM): 6.47
Profit in 2022: – ₹2.81 crore
HCL Technologies Ltd.
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. The company’s share price has declined by 0.27% in the last year.
P/E ratio (TTM): 18.99
EPS (TTM): – 49.68
Profit in 2022: – ₹13,500 crore
MIC Electronics Ltd.
The company manufactures light-emitting diode displays and LED lighting, including indoor and outdoor displays, mobile displays, and application-specific displays. The company has been operational since 1988.
P/E ratio (TTM): 9:52
EPS (TTM): – 1.19
Profit in 2022: – ₹2.96 crore
Surana Telecom and Power Ltd.
The Indian company is engaged in the manufacturing and trading of solar-related products. Its segments include renewable energy and trading, and others.
Their stocks have appreciated 37.65% in the last year.
P/E ratio (TTM): 11.11
EPS (TTM): – 0.93
Profit in 2022: – ₹6.49 crore
Vedanta Ltd. is an Indian multinational mining company primarily involved in mining iron ore, gold, and aluminium. The group plans to invest Rs 1.54 lakh crore into semiconductor manufacturing by Vedanta resources holding company Volcan Investment Ltd.
P/E ratio (TTM): 7.15
EPS (TTM): – 43.35
Profit in 2022: – ₹18.802 crore
Solex Energy Ltd.
Solex Energy manufactures solar photovoltaic modules and offers turnkey solar solutions across different verticals of light-emitting diodes, street lights, solar water heaters, solar water pump surfaces, and others. They provide end-to-end engineering, procurement, and construction services to customers.
P/E ratio (TTM): 233.43
EPS (TTM): – 1.27
Profit in 2022: – ₹0.99 crore
The vision of India’s Atma Nirbharata in the semiconductor and electronic chip market has given the impetus needed by the Semicon Indian program with a total outlay of ₹ 76,000 crores to develop and strengthen the semiconductor manufacturing ecosystem in India. If you want to invest in any of these stocks but don’t have a Demat, you can open a demat account with Angel One in under five minutes.
Also read: Best Metal Stocks in India
Disclaimer: This blog is exclusively for educational purposes. The securities quoted are exemplary and are not recommendatory.