Best Semiconductor Stocks in India 2024 to add to your watchlist!
Best Semiconductor Stocks in India 2024 to add to your watchlist!
The semiconductor industry has been playing a crucial role in driving technological advancements in India. As the demand for electronic devices surged, companies were continuously innovating to meet this need. This sector not only supports the growth of various industries but also aims to reduce India’s reliance on semiconductor imports.
By promoting local manufacturing capabilities, the semiconductor industry is paving the way for economic growth and technological self-sufficiency in India. In this article, we are exploring the best semiconductor stocks in India 2024 and their presence, financials, and key indicators.
Semiconductor Industry Overview
The semiconductor industry in India is poised for exponential growth, with the market size expected to surge from US$34.3 billion in FY23 to reach US$100.2 billion by FY32, representing an impressive compound annual growth rate (CAGR) of 20.1%.
This remarkable growth is fueled by the Indian government’s substantial investment in the sector, which has allocated a 130% increase to INR 690.3 billion (US$83.28 million) in funding for semiconductor and display manufacturing initiatives in the latest 2024 Union Budget.
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Government Initiatives for the Semiconductor Industry in India
The government has highlighted the significance of “Silicon Diplomacy” for India, highlighting its rise to prominence in the semiconductor manufacturing industry. The government has announced over ₹1.5 lakh crore in investments to establish India as a trusted global supplier of semiconductor chips.
India has signed its semiconductor cooperation with countries like the US, Japan, and Singapore through initiatives like the QUAD Semiconductor Supply Chain Initiative and bilateral agreements. It has also been chosen as Vice Chair of the Indo-Pacific Economic Framework’s Supply Chain Council.
The Semicon India Program is a pivotal government initiative aimed at establishing a robust semiconductor industry in India. With an allocation of INR 760 billion, the program supports various sectors, including silicon semiconductor fabs, display fabs, and semiconductor design. The India Semiconductor Mission (ISM) oversees this initiative, managing application processes and financial appraisals to ensure effective implementation. The program aims to enhance the growth of India’s semiconductor ecosystem.
Key components of the program include the Semiconductor Fabs Scheme, which offers up to 50% of project costs for establishing fabrication facilities, and the Design Linked Incentive (DLI) Scheme, which incentivizes semiconductor design activities. These schemes require significant capital investments and aim to foster innovation and local manufacturing capabilities, positioning India as a competitive player in the global semiconductor market.
Best Semiconductor Stocks in India 2024
Kaynes Technology India
Kaynes Technology India is a leading end-to-end and IoT solution-enabled integrated electronics manufacturing player. The company has capabilities across the entire spectrum of electronics system and design manufacturing (ESDM). Kaynes Technology India provides services like conceptual design, process engineering, integrated manufacturing, and life cycle.
The company supports various segments, such as automotive, industrial, aerospace and defence, outer space, nuclear, medical, railways, the Internet of Things (IoT), information technology, and other segments. Kaynes Technology India has operated 8 manufacturing plants and 3 service centers. The company has reported more than 1500 employees.
Kaynes Technology India Limited is advancing India’s semiconductor landscape with its new unit in Sanand, Gujarat. The Union Cabinet approved this project, which involves an investment of Rs 3,307 crores. This facility will assemble, test, mark, and pack 60 lakh chips daily. The chips produced will serve diverse sectors, including automotive, consumer electronics, and telecom.
Additionally, Kaynes is investing Rs 2,800 crores in a semiconductor OSAT facility near Hyderabad. These initiatives aim to enhance domestic semiconductor production and reduce reliance on imports, supporting India’s technological self-sufficiency efforts.
Financial Analysis:
Revenue: Keynes Technology India Limited’s revenue has increased by 60.30%, from 1126 crore in FY23 to 1805 crore in FY24. The company’s revenue mainly comes from automotive (29%), industrial (48%), aerospace and strategic electronics (3%), medical (3%), railways (11%), and IT and others (7%). The revenue has grown at a CAGR of 48.82% over the last four years.
Net Profit: The net profit of the company has grown by 92.63%, from 95 crore to 183 crore in FY24. The net profit has grown at a CAGR of 112.35% over the last four years.
Key Financial Analysis
CG Power & Industrial Solutions
CG Power & Industrial Solutions was established in 1937. The company has been a pioneer and continues to lead in the management and application of electrical energy. CG Power & Industrial Solutions has manufacturing plants across nine locations in India and one in Sweden. The company has reported 5 regional and 14 branch offices and 3113 employees.
CG Power & Industrial Solutions Limited is expanding into the semiconductor industry by establishing an outsourced semiconductor assembly and testing (OSAT) facility in Sanand, Gujarat. This facility, set up in partnership with Renesas Electronics and Stars Microelectronics, will manufacture advanced semiconductor packages.
With an investment of ₹7,600 crores, it will produce up to 15 million units per day, catering to industries like automotive, consumer electronics, and 5G, aligning with India’s Aatmanirbhar Bharat initiative.
Financial Analysis:
Revenue: CG Power & Industrial Solutions Limited’s revenue has grown by 15.40%, from 6972.54 crore in FY23 to 8045.98 crore in FY24. The revenue mainly comes from industrial business (67.47%), power business (32.26%), and others (0.27%). CG Power & Industrial Solutions Limited’s revenue has grown at a CAGR of 28.36% over the last three years.
Net profit: The net profit of the company has surged from 962.97 crore to 1427.61 crore in FY24, which has grown by 48.25%. CG Power & Industrial Solutions Limited’s net profit has grown at a CAGR of 2.77% over the last three years.
Key Financial Analysis
ASM Technologies
ASM Technologies is a well-known information technology consulting and software services company. It was established in 1992. The company operates globally, including in India, the USA, Japan, the UK, and Singapore. The company specializes in semiconductors, engineering equipment, and transportation. Its offerings include product design, reverse engineering, embedded software, and automation.
ASM Technologies Limited has extensive knowledge and experience in the design and development of systems needed by businesses that manufacture semiconductor equipment. The company meets the rigorous demands of the semiconductor industry by leveraging its expertise in embedded engineering and VLSI design. The company’s semiconductor-related services cater to emerging markets such as IoT, smart cities, Industry 4.0, and virtual reality.
Financial Analysis:
Revenue: ASM Technologies Limited’s revenue has decreased by 8.51%, from 220.41 crore in FY23 to 201.65 crore in FY24. The company’s revenue has come mainly from the sale of services (90.45%) and the sale of goods (9.55%) in FY24. The revenue has grown at a CAGR of 18.08% over the last five years.
Net profit: The net profit of the company has turned to a net loss in FY24, which is from 7 crore in FY23 to -7 crore in FY24.
Key Financial Analysis
RIR Power Electronics
RIR Power Electronics was established in 1969. The company is a prominent leader in the power semiconductor industry. The company was formerly known as Ruttonsha International Rectifier Limited. It specializes in manufacturing high-power semiconductor devices in India.
The company has a strong global presence and serves over 300 customers across various sectors, including defense, aerospace, and renewable energy. RIR Power Electronics manufactures high-power semiconductor devices capable of handling up to 9000 volts and 6000 amperes.
RIR Power Electronics is actively advancing in the semiconductor industry by establishing India’s first silicon carbide (SiC) power semiconductor plant in Odisha. The investment of INR 618.6 crore is set to reduce India’s dependency on imports and enhance the supply chain for SiC components. The plant will produce advanced SiC wafers and devices, which are crucial for applications in electric vehicles, renewable energy, and high-power electronics, driving efficiency and sustainability in the industry.
Financial Analysis:
Revenue: RIR Power Electronics Limited’s revenue has grown by 16.45%, from 57.33 crore in FY23 to 66.76 crore in FY24. The company’s majority of sales are domestic (84%) and international (16%). RIR Power Electronics revenue has diversified into semiconductors by 44%, rectifier assemblies by 29%, traded goods by 12%, and others by 15%. RIR Power Electronics Limited’s revenue has grown at a CAGR of 30.71% over the last three years.
Net profit: The net profit of the company has also increased from 5.97 crore in FY23 to 7.03 crore in FY24, which has grown by 17.76%. RIR Power Electronics Limited’s net profit has grown at a CAGR of 91.29% over the last three years.
Key Financial Analysis
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Moschip Technologies
Moschip Technologies was founded in 1999. It is India’s first publicly traded fabless semiconductor company. It specializes in designing and developing system-on-chip (SoC) technologies and software solutions. The company serves diverse sectors, including aerospace, defense, consumer electronics, and IoT applications.
Moschip focuses on providing value-added services in very-large-scale integration (VLSI) design and application-specific integrated circuits. Its product offerings include I/O connectivity solutions and SoCs. Moschip Technologies Limited’s operating segments include semiconductors and embedded system design & IoT engineering. The company generates maximum revenue from the semiconductor segment. The company has an operation of 6 offices, which include 4 in India and 2 abroad till FY23.
Financial Analysis:
Revenue: Moschip Technologies Limited’s revenue has zoomed from 198.36 crore in FY24 to 293.91 crore in FY24, which has grown by 48.17%. The company revenue is split between semiconductors by 78.71% and embedded by 21.29% in FY24. The company has earned 63.6% of its revenue from exports. The revenue has grown at a CAGR of 31.42% over the last five years.
Net Profit: The net profit of the company has increased by 59.87%, from 6.18 crore in FY23 to 9.88 crore in FY24.
Key Financial Analysis
Adani Enterprises
Adani Enterprises was founded by Gautam Adani in 1988. It is the flagship company of the Adani Group. Initially a commodity trading firm, it has transformed into a major multinational holding company with diverse interests, including mining, power generation, renewable energy, and infrastructure development. The company has operations in various sectors such as airports, data centers, and defense, making it one of the fastest-growing diversified businesses in India.
The Adani Group and Israel’s Tower Semiconductor have announced a joint investment of ₹83,947 crore ($10 billion) to establish a semiconductor manufacturing facility in Panvel, Maharashtra. The project will be executed in two phases, with the first phase requiring an investment of ₹58,763 crore and expected to have an initial capacity of 40,000 wafers per month. The second phase has an investment of ₹25,184 crore and has expanded to 80,000 wafers per month. The chips will be used in various applications such as smartphones, drones, cars, and other mobility solutions.
Financial Analysis:
Revenue: Adani Enterprises Limited’s revenue has dropped by 24.40%, from 127540 crore in FY23 to 96421 crore in FY24. Adani Enterprises Limited’s revenue has grown at a CAGR of 19.02% over the last 5 years.
Net profit: The net profit of the company has grown by 37.70%, from 2422 crore in FY23 to 3335 crore in FY24. Adani Enterprises Limited’s net profit has grown at a CAGR of 45.81% over the last 5 years.
Key Financial Analysis
Conclusion
In conclusion, the semiconductor industry in India has witnessed remarkable growth with the government’s substantial investments and initiatives like the Semicon India Program and India Semiconductor Mission. Companies were investing heavily in new facilities and technologies.
Among the best semiconductor stocks in India 2024, Kaynes Technology was expanding its manufacturing capabilities, Moschip Technologies was focusing on SoC design, CG Power was venturing into OSAT facilities, ASM Technologies was leveraging its expertise in embedded engineering, RIR Power Electronics was establishing a silicon carbide plant, and Adani Enterprises was partnering to create a major semiconductor facility.
These will help to push India’s progress in the semiconductor sector. What do you think about the semiconductor industry in India? Let us know in the comments below.
Written By Nikhil Naik
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