With the evolution of technology and recent transformation toward digitalisation, there is a high demand for semiconductor products. Such an upward curve has eventually made semiconductor stocks a better and more exciting investment option.
With the demand fueling around electronic devices and their innovation, along with government initiatives to boost production processes in manufacturing companies, investors have started to eye over the best semiconductor stocks in India.
As the country has started to rely low on semiconductor imports, the stage is set for an innovative and transformative journey for semiconductor stocks in the upcoming days.
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Valid reasons to invest in semiconductor stocks
The key benefits behind investing in semiconductor stocks are as follows:
- Shaping technological advancements: Semiconductors remain the major backbone in manufacturing modern-day devices like computers, smartphones, and cars. India-based semiconductor companies are crucial to empowering the global tech revolution. The semiconductor chips are in high demand due to the introduction of 5G and Artificial Intelligence in the country, which has indeed let the best semiconductors stocks perform better in recent times.
- Continual economic growth: Once you have started investing in a semiconductor company’s stocks, you are all set to create a diversified portfolio and be exposed to global tech trends.
Semiconductor companies are marching forward to unleash advancements in cloud computing and artificial intelligence. By analysing the semiconductor companies’ share price and entire market performance, you can get a clear idea of their growth potential.
- Penny stock investment opportunity: Semiconductor penny stocks offer lower entry points and potential growth, considering the investment risk involved. Given the risk factors, the smaller companies providing semiconductor business in India can offer substantial returns as the country has started scaling up its manufacturing capabilities.
Best semiconductor stocks in India
The semiconductor sector in India offers exponential investment value for both new and experienced investors.
Here are the best-performing semiconductor stocks based on market cap value (as of Nov 13, 2024)
| Company Name | Market Cap (₹ Cr)* | P/E Ratio |
| HCL Technologies | 5,07,455 | 30.16 |
| Bharat Electronics | 2,12,166 | 46.74 |
| Vedanta | 1,73,973 | 17.25 |
| CG Power & Industrial Solutions | 1,09,088 | 121.63 |
| Dixon Technologies | 89,768 | 162.63 |
| Tata Elxsi | 41,319 | 50.58 |
Best semiconductor stocks – Quick Overview
- HCL Technologies
HCL Technologies has clients across every major vertical, offering valid industry solutions for manufacturing, financial services, healthcare, life sciences, technology and services, retail, telecom and media, and public services.
They do empower organisations coming from varied industries to identify and seize potential opportunities that can leverage Artificial Intelligence to accelerate and automate the business process.
- Bharat Electronics
Bharat Electronics produces the latest and most advanced electronic products for the Indian army, Air Force, and Navy. They have diversified their services into numerous areas, such as e-governance solutions, electronics, constructing smart cities, and more.
- Vedanta
Vedanta Limited’s primary interests revolve around oil and gas, semiconductors, glass, steel, and more. They have been continually fostering diverse and low-cost assets with exponential potential to fuel their ambitions. The majority of their investments are made in smart processes, empowering people, and creating strong corporate governance to help address the nation’s growing needs.
- CG Power & Industrial Solutions
CG Power & Industrial Solutions is well known for manufacturing extensive power distribution types of transformers, circuit breakers, switchgears, and more. They have always stood as a company boasting a rich repository of sporting engineering capabilities, and technology to envision customer equity under the Indian capital goods sector.
- Dixon Technologies
Dixon Technologies offers design-focused solutions for consumer durables, lighting, home appliances, security devices, and mobile phones to customers from different parts of the world. They also provide distinctive repairing and refurbishment services for varied products, including LED TV panels, set-top boxes, and more.
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Things to consider before investing in semiconductor stocks
Investments made in semiconductor stocks, irrespective of their size, can be rewarding. Yet, certain factors must be learned and understood before investing in this sector. Here are a set of factors that help shape and determine the performance of semiconductor stocks in one way or another.
Assessing technological edge
As an investor, you must consider the current technological prowess of every company listed in the share market. Detailed research on recent semiconductor sector-based innovation will remain crucial in understanding the stocks better.
Remain informed on the latest market trends
To make a wise decision, always remain aware and informed regarding the market trends and global demand surrounding the best semiconductor stocks in India. Get to know and understand the geopolitical influences, industry shifts, and upcoming technologies to make definite decisions.
Diversifying across semiconductor subsectors
To mitigate possible risks that are usually associated with market volatility, consider investing in sub sectors such as those found within the semiconductor industry. These can either be processors or memory chips. As an investor, you must focus on creating a diversified portfolio that best buffers against any sector-based challenges.
Considering financial metrics
Financial metrics are utilised to find the price-to-earnings average ratio and dividends that can be yielded from investing in semiconductor stocks. In time, you must gain insights that value the possible returns of such stocks in the upcoming months and years. Keep in mind that historical performance does not add up, support, or guarantee the future success of the stocks.
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To wrap it up
By now, you must have an idea of investing in the best semiconductor stocks in India. With a relentless pursuit of unwavering determination and excellence, the semiconductor industry in India is at its prime time to redefine the knowns and unknowns of technological innovation, leading the nation toward growth and prosperity.
Both newcomers and expert stock market investors can yield substantial growth in semiconductor stock investment as this sector is all set to face huge demand in terms of technological advancements. Perform complete research and consider investment risk factors; you can wisely invest in the best semiconductor stocks to gather significant long-term returns.
Frequently Asked Questions
- Which is the best semiconductor stock to invest in India?
Before identifying the best semiconductor stocks, you must gather details related to your stock investment risk factors and future investment return goals. As of Nov 12, 2024, HCL Technologies, Bharat Electronics, and Vedanta share the first three places in terms of market cap. Before investing in their semiconductor stocks, get to know their fundamentals, growth strategy, and technological capabilities to mitigate investment-based risks.
- Is It Good to Invest In Semiconductor Stocks?
Given the market trends, the semiconductor industry has showcased significant growth, with an increase in demand for the invention of electronic and technology-based devices. Other than considering the current market trend, analyse your investment needs and the kind of return you are looking forward to yielding out of it. This way, you can wisely proceed with the investment process given the current market trend changes.
- Which Is The Largest Semiconductor Company In India?
The largest semiconductor company in India is Larsen & Toubro (L&T), which plays a key role in supporting India’s expanding semiconductor sector. The company is known for its infrastructure expertise. L&T is instrumental in developing chip manufacturing and assembly facilities. It plays a vital role in supporting India’s goal of becoming a self-sufficient semiconductor hub by 2026 through partnerships and government initiatives like “Semicon India.”
- Do semiconductor stocks have a future?
India’s semiconductor sector provides compelling growth potential based on varied factors. If your investment can, one way or another, meet with the inherent risks along with a long-term investment and return horizon, then investing in semiconductor stocks shall be a rewarding proposition. These particular sector stocks are expected to grow in the long run due to its continued demand for technological advances and electronic product manufacturing. Given these points, you still need to research on your side to make informed investment decisions.
- How to invest in semiconductors in India?
As an investor, you can invest in individual semiconductor stocks or a mutual fund deposit that holds the stocks in it. Below is a list of steps to help you start investing in semiconductor stocks.
- Open a demat account to your name
- Using your demat account credentials, create a trading account
- Add the required set of funds to your account
- Conduct valid research on the best and top-performing semiconductor stocks in India and pick the ones to invest in
- Place your buy order to add it to your portfolio.
