Best Semiconductor Stocks to Buy in India in 2024

Best Semiconductor Stocks to Buy in India in 2024

The tremendous growth potential of Indian semiconductor stocks has made them an increasingly prevalent topic in the financial world lately. The Indian semiconductor market is expected to grow at an amazing 20% annually and reach USD 76.3 billion by 2025. India’s semiconductor stocks offer investors a strong investment opportunity as the demand for electronic gadgets grows globally.

What are Semiconductor Stocks?

Semiconductor stocks are shares of companies that manufacture and market semiconductors. These companies are significant in numerous other sectors, such as technology, automobiles, healthcare, etc. Sales of semiconductors jumped to USD 47.6 billion in January 2024, providing investors with opportunities for growth, durability, and significance in fueling technological advances shaping our digital future.

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Top 10 Semiconductor stocks to Invest in 2024

  1. Bharat Electronics Ltd.
  2. CG Power & Industrial Solutions Ltd.
  3. ABB India Limited
  4. Apar Industries Ltd.
  5. Havells India Ltd.
  6. V Guard Industries Ltd.
  7. Polycab India Ltd.
  8. Tata Elxsi
  9. Hitachi Energy India Ltd.
  10. Honeywell Automation India Ltd.

Overview of Best Semiconductor Stocks to Invest in India

Bharat Electronics Ltd.

BEL mainly manufactures advanced electrical appliances for aeroplanes and on the ground. BEL is among the sixteen PSUs under India’s Ministry of Defense. The Indian government has awarded it the title of Navratna. Bharat Electronics is anticipated to achieve annual sales and profit growth of 14.2% and 16.1%, respectively.

CG Power & Industrial Solutions Ltd.

Crompton Greaves Limited, or CG Power and Industrial Solutions Limited, is an Indian multinational corporation that designs, manufactures, and markets equipment for rail transportation, power production, transmission, and distribution. Earnings for CG Power and Industrial Solutions are predicted to rise by 45% over the next few years, leading to a very promising future.

ABB India Limited

ABB India Limited produces heavy engineering and industrial machinery and carries on engineering and construction projects. Revenue and earnings growth for ABB India are anticipated to increase by 15.3% and 14.7% per year, respectively. An annual growth of 14.7% for EPS and a 22.2% return on equity in three years is expected.

Apar Industries Ltd.

Apar Industries Ltd. is the leading exporter of transformer oils from India. It is the world’s largest one-stop destination for solutions related to design, conductor testing, manufacturing, and upgrading transmission lines. It is also the biggest exporter of conductors from India. Revenue and profit growth for APAR Industries are anticipated to increase by 14.9% and 9.4% per year, respectively.

Havells India Ltd.

Havells India Limited is a globally renowned Fast Moving Electrical Goods (FMEG) company. Various consumer and industrial electrical devices are designed, produced, distributed, and marketed by the company. Revenue and earnings growth for Havells India is anticipated to increase by 12.4% and 23.1% per year, respectively.

V Guard Industries Ltd.

Based in Kochi, India, V-Guard Industries Ltd produces household appliances and electrical products. The company produces UPSs, geysers, voltage stabilisers, electric fans, pumps, solar water heaters, motors, and cables. The sector P/E ratio is 25.01, while V-Guard Industries’s TTM P/E ratio is 54.34.

Polycab India Ltd.

Fast-moving electrical goods (FMEG) and wires are Polycab’s primary commercial operations. These products are sold under the POLYCAB trademark. POLYCAB has been generating a profit for the past twelve months, and over the next three years, the company’s revenue is expected to increase at a pace of 19% annually.

Tata Elxsi

Tata Elxsi is a multinational provider of design and technology services with a focus on the semiconductor sector. The volatility of the stock exceeds that of the Nifty by 2.09 x. Its strategic partnerships and industry-spanning experience highlight Tata Elxsi’s dominant position in India’s semiconductor ecosystem.

Hitachi Energy India Ltd.

In the field of power technology, Hitachi Energy India Limited (previously ABB Power Products and Systems India Limited) is a world leader and innovator. The company’s introduction of the 300 mm wafer represents a milestone in power semiconductor technology.

Honeywell Automation India Ltd.

Honeywell Automation India Limited offers integrated software and automated solutions that are comprised of building and process solutions. In addition to providing a broad range of combustion, environmental, sensing, and control products, it also offers technical services for automation and control to clients worldwide.

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Latest Performance of Top 10 Semiconductor Stocks

Company Name Mar Cap Rs.Cr. ROCE % CMP / BV Debt / Eq

%

ROE % P/E % Div Yld %
Bharat Electronics Ltd. ₹ 1,38,813 29.9 ₹ 190 o.4 22.8 38.9 0.95
CG Power & Industrial Solutions Ltd. ₹ 71,754 61.6 ₹ 470 0.8 66.0 83.5 0.32
ABB India Limited ₹ 1,21,990 30.5 ₹ 5,767 0.00 22.9  97.7 0.10
Apar Industries Ltd. ₹ 24,544 53.1 ₹ 6,107 0.15 33.1 30.0 0.65
Havells India Ltd.  ₹ 94,014 22.3 ₹ 1,502 3.9 17.0 79.5 0.50
V Guard Industries Ltd. ₹ 14,143  14.5  ₹ 325 0.26 12.0  71.4 0.40
Polycab India Ltd.  ₹ 72,086 27.0 ₹ 4,795 77.71 20.0 43.4 0.42
Tata Elxsi ₹ 48,031 47.7 ₹ 7,703 11.3 41.1 60.3 0.79
Hitachi Energy India Ltd. ₹ 27,672 12.9 ₹ 6,503 27.6 8.03  274 0.05
Honeywell Automation India Ltd. ₹ 33,775 19.5 ₹ 38,186 0.0059 14.5 72.6 0.25

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Overview of the Semiconductor Industry in Indian Market

India has always aspired to be the global hub for semiconductors. The market for semiconductors in India was estimated to be around $23.2 billion in value, and it is expected to expand at a compound annual growth rate (CAGR) of 17.10% to reach $80.3 billion by 2028.

Advantages and Risks Associated with Investing in Semiconductor Stocks

Advantages:

  • In the upcoming years, it is expected that the Indian semiconductor market will rise significantly.
  • Indian semiconductor companies might provide lower values than their global counterparts.
  • Industry growth is being aided by government-sponsored programmes like “Digital India” and “Made in India.”

Disadvantages:

  • Supply chain interruptions and trade disputes may impact production.
  • Chip demand is affected by the industry’s sensitivity to economic downturns.
  • Margin pressure can come from heated competition from well-established players.

Why should you invest in Semiconductor Stocks in India?

Investing in semiconductor shares may be a good long-term strategy with the growth of industries such as automotive electronics, 5G technology, and artificial intelligence. The size of the India semiconductor market is anticipated to grow at a compound annual growth rate (CAGR) of 25.7% from 2022 to 2032 to reach USD 271.9 billion.

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  • 20 Lac+ unique clients
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How to start Investing in Semiconductor Stocks?

SMC is your strategic partner guiding you through the complexities of the semiconductor industry and transforming your search for financial success into an exciting and fulfilling journey. We are committed to transforming your quest for financial success into an exciting and rewarding journey.

Start your journey in 4 easy steps with us:

  1. Go to the official website of SMCtradeonline or simply download the SMC Ace app.
  2. Open a free Demat account.
  3. Start investing.

WHY SMC

  • 20 Lac+ unique clients
  • 33+ Years of Serving
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Conclusion

Investing in semiconductor stocks is a fascinating opportunity for growth-oriented investors due to the surge in demand for innovative technologies. Investing strategically in Indian semiconductor stocks, which have the potential to yield significant profits given the ongoing rise in chip demand, makes them an appealing asset to any diversified portfolio.

Author: All Content is verified by SMC Global Securities.

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