Semiconductors are the backbone of modern technology, powering everything from smartphones and electric vehicles to artificial intelligence and cloud computing. With India’s growing focus on chip manufacturing, the sector is seeing rapid expansion backed by government initiatives and private investments. As a result, some of the best semiconductor stocks in India are gaining attention from investors looking for long-term growth opportunities. With rising demand and technological advancements, this sector holds great potential for those seeking to invest in the future of India’s semiconductor industry.
The semiconductor industry in India is at a crucial turning point, driven by rising demand and government-backed initiatives. With no domestic chip production, India has relied heavily on imports from countries like Taiwan, China, and South Korea. However, the government is actively working to change this through the India Semiconductor Mission (ISM) and the Production Linked Incentive (PLI) scheme, aiming to boost local manufacturing.
Key developments include a ₹91,000 crore semiconductor fabrication plant in Dholera, Gujarat, backed by Tata Electronics and Taiwan’s Powerchip Semiconductor Manufacturing Corp (PSMC). Additionally, Micron Technology is setting up a major packaging unit, and Kaynes Semicon has received approval for a ₹3,300 crore semiconductor unit in Sanand, Gujarat.
The Indian semiconductor market, valued at $34.3 billion, is projected to grow at a CAGR of 16.86%, reaching around $80.3 billion by 2028. This rapid expansion, fueled by the EV revolution, 5G deployment, and AI advancements, makes India a promising hub for semiconductor investments.
Overview of Contents
Best Semiconductor Stocks to Buy for High Growth
| Stock Name | Market Cap (₹ Cr) | 1Y Return (%) |
|---|---|---|
| Dixon Technologies (India) Ltd | 83,055.32 | 94.58% |
| Vedanta Ltd | 158,017.86 | 62.68% |
| Bharat Electronics Ltd | 184,535.37 | 31.71% |
| CG Power and Industrial Solutions Ltd | 88,727.94 | 32.10% |
| Polycab India Ltd | 70,391.85 | 1.77% |
| HCL Technologies Ltd | 441,557.08 | -4.27% |
| ABB India Ltd | 109,020.50 | -9.18% |
| Havells India Ltd | 90,984.92 | -3.56% |
| Bharat Heavy Electricals Ltd | 65,267.80 | -22.67% |
| Tata Elxsi Ltd | 34,649.30 | 0.30% |
The semiconductor industry is closely tied to the rapid advancements in electric vehicles (EVs). With the increasing adoption of EVs, demand for semiconductor chips used in battery management, autonomous driving, and vehicle connectivity is rising. If you’re looking to diversify within the tech-driven automotive sector, exploring the Best EV Stocks in India can help identify promising investment opportunities.
Overview of Best Semiconductor Stocks List in India
The Indian semiconductor industry is experiencing rapid growth, driven by increasing demand for technology-driven products, government initiatives, and rising investments. With the “Make in India” and Production Linked Incentive (PLI) schemes, domestic semiconductor manufacturing is gaining momentum. Companies involved in semiconductor design, manufacturing, and related industries have seen varying levels of stock performance over the past year. Below is an overview of the top semiconductor-related stocks in India based on market capitalization and their 1-year returns.
1. Dixon Technologies (India) Ltd
Dixon Technologies (India) Limited, founded in 1993, is a leading Electronic Manufacturing Services (EMS) company operating in consumer electronics, lighting, home appliances, CCTVs, and mobile phones. It also engages in reverse logistics and manufactures security surveillance equipment, wearables, and AC-PCBs.
As one of the largest LED TV manufacturers in India, Dixon meets over 35% of the country’s demand and is the largest ODM player in lighting. The company operates on both OEM (Original Equipment Manufacturer) and ODM (Original Design Manufacturer) models, with ODM offering higher profitability due to in-house R&D and raw material selection. Dixon’s revenue is largely driven by mobile & EMS (60%), followed by consumer electronics (25%) and lighting (12%).
With 22 manufacturing facilities across India, it has a strong production capacity, including 30 million smartphones and 50 million feature phones annually. The company has received approvals under the PLI scheme for mobile phones, lighting, telecom, networking products, and IT hardware.
Dixon continues to expand through strategic acquisitions, such as its recent stake purchase in Ismartu India Pvt. Ltd., and partnerships with major global brands like Samsung, Motorola, Xiaomi, and Reliance Jio. With aggressive capex plans of ₹300-400 crore annually and growing revenue streams, Dixon remains a dominant player in India’s electronics manufacturing sector.
| Growth Metric | 10 Years | 5 Years | 3 Years | TTM (Trailing 12 Months) |
|---|---|---|---|---|
| Compounded Sales Growth | 32% | 43% | 40% | 106% |
| Compounded Profit Growth | 39% | 42% | 32% | 81% |
| Stock Price CAGR | - | 75% | 50% | 95% |
| Return on Equity (ROE) | 24% | 24% | 23% | 25% |
2. Vedanta Ltd
Vedanta Ltd is a diversified natural resources company engaged in the exploration, production, and sale of zinc, lead, silver, copper, aluminum, iron ore, and oil & gas. It operates in India, South Africa, Namibia, Ireland, Liberia, and the UAE. India contributes ~65% of total revenue, followed by Malaysia (9%) and China (3%).
Vedanta is India’s largest private crude oil producer, accounting for ~25% of the country’s production, and has the largest aluminum installed capacity at 2.3 MTPA with a 47% market share. It also holds a ~65% stake in Hindustan Zinc Ltd, India’s largest zinc producer. The company is expanding its aluminum and oil & gas businesses with a $2.1 billion growth capex plan.
Vedanta’s major power projects include Talwandi Sabo Power Ltd in Punjab, with a 25-year power purchase agreement. Its iron ore operations in Goa remain suspended due to legal issues, while Karnataka has a 5.9 MTPA capacity. Internationally, Vedanta owns zinc assets in South Africa & Namibia and a copper mine in Australia. The company has secured coal mines for backward integration and continues investing in renewable energy.
| Growth Metric | 10 Years | 5 Years | 3 Years | TTM (Trailing 12 Months) |
|---|---|---|---|---|
| Compounded Sales Growth | 4% | 8% | 13% | 14% |
| Compounded Profit Growth | 3% | 9% | 18% | 21% |
| Stock Price CAGR | - | 15% | 22% | 30% |
| Return on Equity (ROE) | 10.5% | 12% | 14% | 16% |
3. Bharat Electronics Ltd (BEL) Overview
Incorporated in 1954, Bharat Electronics Ltd (BEL) is a leading defense electronics manufacturer in India, expanding into non-defense sectors. In FY24, defense contributed 81% of revenue, with key offerings in radar, fire control, electronic warfare, and communication systems, registering 19% YoY growth. The non-defense segment (15%) is rapidly expanding into Homeland Security, Smart Cities, Cyber Security, and Medical Electronics, achieving 157% growth since FY22. The exports segment (4%) supplies products to France, the USA, Israel, and ASEAN countries, with a 236% revenue increase since FY22.
BEL’s order book stands at ₹76,705 Cr, with 86% from defense, 11% from non-defense, and 3% from exports. The company has signed MoUs with AAI, Delhi Metro, and Rosoboronexport for ammunition exports to Russia and partnered with Reliasat Inc. Canada for space technology collaboration. BEL plans ₹800 Cr capex in FY25 to set up new plants in Palasamudram, Nimmakuru, Hyderabad, and Ibrahimpatnam. The company invests 7% of revenue in R&D, with 77% of turnover from indigenous products and 1,199 IPRs filed (580 granted). In FY24, it introduced 40 new products, including the Compact Gun Fire Control System and Voice Communication & Control System.
BEL is diversifying into missile systems, RF Seekers, arms & ammunition, and anti-drone systems, while also leveraging dual-use technologies in solar, satellite, and SDR solutions. It has established a joint venture with Israel Aerospace Industries (BEL IAI AeroSystems Pvt Ltd) to strengthen its defense capabilities. Looking ahead to FY25, BEL targets ₹25,000 Cr in new orders, aims for 15-17% revenue growth, and expects gross margins of 40-42% and EBITDA margins of 23-25%. The company is focused on increasing non-defense revenue to 30% of total turnover in the coming years.
| Period | Sales Growth | Profit Growth | Stock Price CAGR | ROE |
|---|---|---|---|---|
| 10Y | 12% | 15% | 23% | 20% |
| 5Y | 11% | 16% | 65% | 22% |
| 3Y | 13% | 24% | 57% | 23% |
| 1Y | 28% | 40% | 29% | 26% |
4. CG Power and Industrial Solutions Ltd
CG Power & Industrial Solutions, a Murugappa Group company, operates in Industrial Systems (71% revenue) and Power Systems (29% revenue). It has 17 manufacturing units in India and is investing ₹400 Cr in FY24-25 for expansion. The company aims to increase exports from 5% to 20% in the next 4-5 years.
In FY23, CG Power approved a ₹400 Cr capital reorganization and redeemed ₹200 Cr NCDs. It has 3 Indian and 18 foreign subsidiaries, with some under liquidation. The company, in partnership with Renesas (Japan) and Stars Microelectronics (Thailand), is setting up a ₹7,600 Cr semiconductor ATMP unit in Gujarat, producing 15 million chips daily for industrial and automotive applications.
| Period | Sales Growth | Profit Growth | Stock Price CAGR | ROE |
|---|---|---|---|---|
| 10Y | -5% | 19% | 28% | -- |
| 5Y | 0% | 42% | 161% | -- |
| 3Y | 40% | 141% | 54% | 70% |
| 1Y | 21% | 9% | 38% | 58% |
5. Polycab India
Polycab India is a market leader in the wires and cables (W&C) segment with a 25-26% share in the organized domestic market. The company has expanded its product portfolio to include Fast-Moving Electrical Goods (FMEG) such as fans, switches, LED lights, and pumps. With operations in 78 countries, it is actively growing its international footprint. In Q1FY25, Wires & Cables contributed 81% to revenue, followed by FMEG at 8% and Others (including EPC) at 11%. Polycab has an ambitious target of achieving ₹20,000 Cr revenue by FY26 under Project Leap. To support this growth, it incurred a capex of ₹858.5 Cr in FY24 and plans to invest ₹1,000-1,100 Cr annually in FY25 and FY26, focusing on high-voltage cable manufacturing and FMEG expansion. The company recently underwent a brand refresh, changing its logo and tagline to “Ideas Connected”.
| Period | Sales Growth | Profit Growth | Stock CAGR | ROE |
|---|---|---|---|---|
| 10Y | 16% | 34% | -- | 19% |
| 5Y | 18% | 28% | 38% | 21% |
| 3Y | 27% | 25% | 29% | 21% |
| 1Y | 25% | 11% | 4% | 23% |
6. ABB India Limited
ABB India Limited, a leading power and automation technology company, benefits from its global parent ABB Ltd. through access to centralized R&D and management support. The company operates in four key segments: Electrification (41%), Motion (32%), Process Automation (22%), and Robotics & Discrete Automation (4%). In CY23, product sales contributed 76% of revenue, while services and projects made up 14% and 10%, respectively. ABB has 25 manufacturing plants across five locations in India, with 90% of its revenue derived domestically. The company reported an order book of ₹8,404 Cr as of Dec 2023, reflecting 30% YoY growth. ABB continues to expand its portfolio, launching ABB Ability SmartMaster for industrial automation and ACH180 compact drive for HVACR systems. Additionally, it has partnered with Simpliforge Creations to advance 3D printing in construction and expanded its digital presence through ABB eMart for B2B and B2C customers.
| Period | Sales Growth | Profit Growth | Stock CAGR | ROE |
|---|---|---|---|---|
| 10Y | 5% | 23% | 16% | 16% |
| 5Y | 11% | 40% | 37% | 19% |
| 3Y | 21% | 63% | 36% | 24% |
| 1Y | 17% | 50% | -8% | 29% |
6. Havells India Ltd
Havells India Ltd. is a leading Fast Moving Electrical Goods (FMEG) company with a strong presence in power distribution equipment. It operates across 20 product categories, with major segments including cables (32%), Lloyd consumer products (24%), electrical consumer durables (18%), switchgears (11%), lighting & fixtures (8%), and others (7%). The company’s revenue grew by 33% between FY22 and FY24, driven by strong growth in cables (36%) and Lloyd (67%).
Havells has a market share of 10-20% across various product segments and an extensive distribution network covering 3,000 towns with 18,000 direct dealers and 2.47 lakh retailers. It has over 900 brand shops and 600+ exclusive “Havells Utsav” stores in rural areas.
The company operates 16 manufacturing facilities, with 90% of sales from in-house production. Recent expansions include a fully operational AC plant in Sri City and a Tumkur power cables plant expected in FY25. Havells plans an annual capex of ₹800-900 Cr in FY26 and FY27, primarily for Cables & Wires.
Internationally, Havells has partnered with KRUT LED for U.S. lighting solutions and Jumbo Group in the UAE for kitchen appliances. It aims to increase export revenue from 3% in FY24 to 10%. Branding efforts include six brands, with ad spending rising from 2% to 3% of revenues.
The company’s market cap stands at ₹93,073 Cr., with a current stock price of ₹1,485, P/E of 66.5, and a dividend yield of 0.62%. ROCE is at 24.4% and ROE at 18%.
| Metric | 10 Years | 5 Years | 3 Years | TTM |
|---|---|---|---|---|
| Compounded Sales Growth | 9% | 13% | 21% | 15% |
| Compounded Profit Growth | 11% | 10% | 8% | 18% |
| Stock Price CAGR | 17% | 19% | 10% | -5% |
| Return on Equity (ROE) | 19% | 19% | 19% | 18% |
7. Bharat Heavy Electricals Ltd (BHEL)
Bharat Heavy Electricals Ltd (BHEL), a Govt. of India-owned integrated power equipment manufacturer, operates in the Power sector (79% of Q1 FY25 revenue) and Industry sector (21%). It has executed over 1,000 utility sets and contributes 53% to India’s installed conventional capacity (~168 GW). The company also serves industries like transportation, defense, aerospace, and renewables. As of Q1 FY25, BHEL holds an order book of ₹1,35,000 Cr, up from ₹1,09,000 Cr in FY20, with major orders including 2×800 MW projects from Adani Power & Mirzapur Thermal, railway transformers, and 175 MW generators for Botswana.
BHEL operates 16 manufacturing units, 2 repair units, 4 regional offices, and multiple service centers. Its R&D capabilities include 12 R&D centers, 5 Research Institutes, and 15 Centers of Excellence, with over 5,600 IPR registrations. The company is actively pursuing new ventures, including a JV with Coal India for a 2,000 TPD Ammonium Nitrate plant, and a technology licensing agreement with BARC for alkaline electrolyzers. It also aims to scale its hydrogen business by building GW-scale electrolyzer capacity by 2030 and expanding into hydro projects in Nepal and Bhutan.
Financially, BHEL has a market cap of ₹68,631 Cr, with its stock trading at ₹197 (52-week high/low: ₹335 / ₹176). Its stock P/E is 132, book value ₹69.5, dividend yield 0.13%, ROCE 3.24%, and ROE 1.08%. However, its debt has increased to ₹8,856 Cr (FY24) from ₹5,080 Cr (FY20) due to lack of cash generation over the period. For FY25, BHEL has guided 15% revenue growth, an EBITDA margin of 23-25%, and an order inflow target of ₹25,000 Cr.
| Growth Metrics | 10 Years | 5 Years | 3 Years | TTM / 1 Year |
|---|---|---|---|---|
| Sales CAGR | -5% | -5% | 11% | 16% |
| Profit CAGR | -22% | -23% | 28% | 15% |
| Stock Price CAGR | 1% | 48% | 56% | -24% |
| ROE | 0% | -2% | 1% | 1% |
8. Tata Elxsi
Tata Elxsi is a leading provider of design and technology services across industries, including Automotive, Media, Communications, and Healthcare. The company offers end-to-end solutions, from research and strategy to software development, validation, and deployment. It operates globally through design studios, development centers, and offices.
The Software Development & Services (SDS) segment contributes ~97% of Q1FY25 revenue, covering Transportation (53%), Media & Communications (33%), and Healthcare (13%). It provides technology consulting, new product design, and embedded product development. The System Integration & Support (SIS) segment (~3%) focuses on Experience Centers, Design Visualization, Cloud Services, and Network Security.
Tata Elxsi has a market cap of ₹35,097 Cr, with a stock price of ₹5,635 (52-week high/low: ₹9,083 / ₹5,303). It has a P/E ratio of 43.3, ROCE of 42.7%, and ROE of 34.5%. The company is focusing on top 20 clients for growth, with revenue concentration from top 10 clients at 58% (Q1FY25).
Tata Elxsi secured multi-million-dollar deals in software development, advanced simulation, and digital twin programs. It partnered with Red Hat, Arm, Wind River, Nidec, and Emerson to drive innovation in 5G networks, software-defined vehicles, and healthcare solutions.
| Growth Metrics | 10 Years | 5 Years | 3 Years | TTM / 1 Year |
|---|---|---|---|---|
| Sales CAGR | 16% | 17% | 25% | 7% |
| Profit CAGR | 27% | 22% | 29% | 2% |
| Stock Price CAGR | 25% | 42% | -8% | -27% |
| ROE | 35% | 35% | 37% | 34% |
Should You Invest in Semiconductor Stocks?
Investing in semiconductor stocks offers strong growth potential due to the industry’s role in advancing technology. However, it comes with risks, including high volatility, intense competition, and cyclicality. Demand fluctuations, rapid technological changes, and price wars can impact profit margins and stock performance.
Additionally, semiconductor stocks in India face global supply chain challenges and heavy capital investment requirements. While the sector holds long-term promise, investors should diversify their portfolios and closely monitor industry trends to navigate market uncertainties effectively.
Why Invest in Semiconductor Stocks?
Investing in semiconductor stocks in India presents an exciting opportunity, as this sector plays a crucial role in driving technological advancements. Semiconductors power modern devices, from smartphones to AI-driven systems, making them essential for industries like telecommunications, automotive, and cloud computing. With rising demand for AI, 5G, and IoT, Indian microchip manufacturers are well-positioned for significant growth.
India is rapidly emerging as a semiconductor manufacturing hub, with increasing domestic production and government-backed initiatives fostering industry expansion. This growth not only boosts the economy but also creates lucrative investment opportunities, especially with the rise of new semiconductor companies entering the stock market. Investors looking for long-term gains can explore leading semiconductor stocks or upcoming companies showing strong potential.
Additionally, semiconductor stocks offer portfolio diversification, aligning with India’s technological progress and global influence. As semiconductor companies act as economic indicators, tracking their performance provides insight into broader market trends. For risk-tolerant investors, semiconductor penny stocks present high-reward opportunities, as smaller firms capitalize on India’s growing role in the global semiconductor supply chain. With innovation and policy support driving this sector, semiconductor stocks remain a compelling choice for forward-looking investors.
Union Budget 2025-26: Impact on India’s Semiconductor Industry
The Union Budget 2025–26 reinforces the government’s commitment to strengthening India’s semiconductor sector through increased funding and strategic policies.
Rs. 7,000 Crore Allocation for Semiconductor Growth
The government has earmarked ₹7,000 crore for semiconductor manufacturing, covering fabrication, packaging, research, and development. This funding, under the Production Linked Incentive (PLI) scheme, aims to accelerate high-tech electronics production in India.
Boost for Fabless Startups & Manufacturing Ecosystem
The Budget emphasizes capacity building by supporting local fabless design startups and enhancing advanced testing and packaging infrastructure. This holistic approach is designed to attract global semiconductor firms while fostering a self-reliant domestic industry.
R&D and Skilling Initiatives
To drive innovation, the government has introduced specialized R&D programs in chip design. Collaborations with academia and global tech firms will focus on skilling and upskilling talent, ensuring India’s semiconductor industry remains globally competitive.
Additionally, technology and media companies linked to the semiconductor sector often gain traction during major sporting events like the IPL. The surge in digital streaming, sponsorships, and fintech usage during the tournament can impact related stocks. If you’re considering seasonal investment opportunities, check out the Top Stocks to Invest in IPL 2025 for insights into stocks that may benefit from the event-driven market trends.
Conclusion
Semiconductor stocks in India offer strong growth potential due to increasing demand, government support, and rapid advancements in AI, 5G, and automation. While the industry presents opportunities, investors should be aware of its cyclical nature and competition. Careful research and diversification can help maximize returns in this evolving sector.
FAQs
Why is the semiconductor industry important for investors?
Semiconductors power modern technology, making them a crucial sector for long-term growth.
How does the Indian government support semiconductor growth?
Through incentives like the ₹7,000 crore allocation in the Union Budget 2025-26 for manufacturing and R&D.
What challenges do semiconductor stocks face?
Industry cyclicality, global competition, and market fluctuations.
How can investors manage risks in semiconductor stocks?
By diversifying portfolios and tracking market trends and policies.
What future trends could impact semiconductor investments?
Advances in AI, 5G, and automation will drive further growth in the sector.