Best Semiconductor Stocks in India

In recent years, the semiconductor industry has witnessed remarkable growth and transformation, driven by technological advancements like the EV revolution and the rollout of 5G. These developments have sparked an increased demand for semiconductors, which are crucial components in electric vehicles, telecommunications infrastructure, and various electronic gadgets we use daily. This blog explores the landscape of India’s semiconductor industry, highlighting key players and investment opportunities.

Semiconductor Industry in India – A Quick Overview

India’s semiconductor industry plays a pivotal role in driving the country’s technology sector. Currently, India heavily relies on semiconductor imports, primarily from Taiwan, China, Korea, and Vietnam. However, with the rising demand for electronic devices, there is a pressing need to reduce this dependency.

In 2023, the Indian semiconductor industry was valued at USD 34.3 billion, and it is projected to reach USD 100.2 billion by 2032, driven by the increasing demand for smartphones, wearables, automotive parts, and computers.

To address the import dependency, the Ministry of Electronics and Information Technology (MeitY) has launched the India Semiconductor Mission (ISM) with a USD 10 billion commitment. This initiative includes incentives for manufacturing and the Design Linked Incentive (DLI) scheme to support semiconductor startups. Additionally, the government’s ‘Make in India’ initiative and the Production Linked Incentive (PLI) scheme offer incentives to establish semiconductor manufacturing facilities in India.

Best Semiconductor Stocks in India 2024

Here is a list of the top semiconductor stocks in India to buy according to analyst ratings:

Top Semiconductor Stocks in India in 2024 as per Market Capitalisation

The following table highlights the best semiconductor stocks in India for 2024, ranked by market capitalization:

Overview of Best Semiconductor Stocks in India

1. Bharat Electronics Limited (BEL) – Established in 1954 under the Ministry of Defence, BEL provides a wide range of products, including defence communication items, land-based radars, naval systems, and electronic warfare systems. The company aims to expand its business beyond defence, focusing on sectors like civil aviation, anti-drone systems, and satellite assembly & integration.
2. CG Power and Industrial Solutions Limited – Founded in 1937, CG Power and Industrial Solutions designs, manufactures, and sells equipment for power generation, distribution, transmission, and rail transportation. It operates through two segments: Power Systems and Industrial Systems.
3. Hitachi Energy India Limited – Formerly known as ABB Power Products and Systems India Limited (APPSIL), Hitachi Energy India Limited is a key player in the power technology sector, offering a wide range of energy technology solutions, including asset and work management, cooling systems, energy storage, and circuit breakers.
4. V Guard Industries Limited – V-Guard Industries is a versatile company serving the mass consumption market, manufacturing and trading a wide array of electronics, electrical, and consumer durables.
5. Havells India Limited – Havells India is a renowned power distribution equipment manufacturer and a leading Fast Moving Electrical Goods (FMEG) company worldwide. It provides a wide range of products, including circuit protection devices, cables, motors, fans, switches, and home appliances.

Semiconductor Penny Stocks India

Penny stocks are stocks trading for a very low price per share, typically less than Rs. 10 in India. While they can offer the potential for high returns, they also come with a high degree of risk.

There are a few listed semiconductor companies in India that could be considered penny stocks. Here are a couple of examples:

• Surana Telecom and Power Ltd is currently trading around Rs. 16 per share. The company manufactures electronic components and sub-systems for various applications.
• SPEL Semiconductor Ltd is another penny stock in the semiconductor space. The company designs, develops, manufactures and markets application specific integrated circuits (ASICs), Integrated Circuits (ICs) and Light Emitting Diodes (LEDs).

Factors to Consider Before Investing in Semiconductor Stocks in India

Before investing in semiconductor stocks in India, consider the following factors:

1. Financial Performance – Evaluate metrics like revenue growth, profitability, and debt levels to understand the company’s financial health.
2. Market Trends – Stay informed about market trends and global demand for semiconductor stocks to make informed investment decisions.
3. Diversification Strategy – Spread your investments across different sub-sectors within the semiconductor industry to mitigate risks associated with market volatility.
4. Regulatory Environments – Be aware of regulatory changes that may impact semiconductor stocks in India, both domestically and internationally.
5. Supply Chain – Monitor the semiconductor supply chain for any disruptions that may impact sales and share prices.

Conclusion

While the semiconductor industry in India presents promising opportunities, it is essential to carefully assess the risks associated with investing in semiconductor stocks. By staying informed about market trends, evaluating financial performance, and maintaining a diversified portfolio, investors can capitalize on the growth potential of India’s semiconductor industry while managing risks effectively.

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