With the rising scale of businesses and rising connectivity all throughout the world, there is a need for cheaper and more advanced electronic components and design services. As a result of the aforementioned developments the India’s electronics market is projected to reach $ 520 Bn by 2025.
“Necessity is the mother of invention” is an old age quote that is perfect for this sector. The demand for better electronic goods is leading to ground breaking technologies being developed. Read along to learn more about this sector and the top electronics stocks in India.
A brief tale about the electronics sector
In caveman times, the one who had the biggest stick was the boss. The same is true today but technology is the new stick, a business that adopts and uses the best and cheapest technology and electronic systems wins the race of capitalism.
To produce better cars, mobiles, electronic devices, etc from your competitors you need more advanced electronic components at an affordable price. A business successful in doing so wins the lottery, a lottery where the prize is profits.
The Indian electronics components industry is expected to experience huge growth in size. The government aims to generate $ 1 tn from this industry by 2025. The government is making all efforts to provide an excellent environment to help the sector flourish. Some of these efforts include backing tech startups and offering tax advantages.
Also read: The startup saga: Tracing the growth of India’s entrepreneurial landscape
Businesses and individuals alike want things to be quicker, less expensive, and more self-operating. This desire shows no signs of fading. It has driven the electronics components sector to such heights that experts predict it will reach 520 billion dollars by 2025. Now let us look at some electronic stocks.
Key players in the Electronics sector
Here are the best 5 electronics components stocks by market capitalization as of November 25, 2024.
- Honeywell Automation India Ltd: Honeywell Auto is a company that provides automation and technology solutions to increase safety, comfort and productivity. As of FY24, 52% of total revenue came from manufactured products. With a strong parentage this company generated 40% of its revenue from exports.
- Syrma SGS Technology Ltd: Incorporated in 2004 an electronic systems and components company, Syrma SGS, specialises in making high-tech equipment like printed circuit boards, motherboards, memory products, etc. In the first half of FY25, the highest revenue contributor was the consumer segment with a 36.8% contribution.
- Cyient DLM Ltd: Cyient manufactures customised electronic goods for its customers. In the second quarter of FY25, the company earned 77% of its revenue from printed circuit boards. The medical technology industry is the biggest contributor to the revenues of the company at 66%.
Also read: Biotechnology industry in India: A sector overview & future prospects
- Centrum Electronics: A leading electronics components company, Cyient has an order book of ₹1,772 crore as of Q2 of the financial year 2025. Domestic sales contribute only 22% to the total revenues and the rest comes from exports. As of Q2FY25, with a 58% revenue share, the aerospace, space and defence sector is the biggest client of this company.
- Kernex Microsystems Ltd: Kernex sells safety systems and software services to the railways. The main product offerings of this company are train protection, signalling systems, headway improvement, etc.
Here’s the financial performance of the aforementioned companies in FY24.
| Fundamental metrics (In ₹ Cr) | Honeywell Auto | Syrma SGS | Cyient DLM | Centrum Electronics | Kernex Microsystems |
| Market cap. | 36,841 | 9,579 | 5,055 | 2,093 | 1,637 |
| Sales | 4,058 | 1,160 | 1,192 | 1,091 | 20 |
| Expenses | 3,463 | 1,115 | 1,081 | 1,005 | 40 |
| Profit before tax | 675 | 29 | 82 | 8 | -27 |
| Net profit | 501 | 20 | 61 | -3 | -27 |
| Net Profit % | 12.3% | 1.72% | 5.11% | -0.02% | -135% |
| 1-year Return (as on Nov 25, 2024) | 11.58% | -5.81% | -2.49% | 10.87% | 53.12% |
Important consideration before investing
The companies involved in the electronic components sector have to invest a lot in new technological capabilities with the advancement of technology. Sometimes these companies invest a lot of money in a particular technology and a wave of change leaves that tech outdated. In such a case these companies sometimes go under. Also, these companies face a lot of competition both domestically and from abroad.
The amount which a company is investing, the kind of technology they’re looking into, and if this technology would be useful for the years to come should be considered before you put your money into this sector. Investing in this field is a long-term commitment, requiring careful research and patience.
Also read: SIP investment: Your path to wealth building
Bottomline
Putting money into the best electronic stocks in India helps diversify your investment mix. This industry is growing fast and will see big demand as the country’s GDP rises. This rapidly changing and dynamic industry sometimes brings forth the best profit opportunities. Always remember the fact that past performance does not predict future gains. So always consider the risk before investing.
FAQs
Which is the largest electronic components sector company in India ?
With a market capitalization of ₹36,822 crore as on November 25, 2024, Honeywell automation is the largest electronic components company in India. This company earned a net profit of ₹501 crore in financial year 24.
Which is the largest electronic components company in the world ?
Foxconn, a Taiwanese company, is the largest electronic components player in the world. It has a market cap of ₹7.58 lakh crore as of November 25, 2024. In FY23, the company earned ₹51,965 crore net profit. .
Which Indian electronics company is best for long term investment ?
For a long term investor seeking a stable and cash rich company, Honeywell automation might be the best pick due to its low debts, highest revenues (in electronic components sector) and a healthy profit margin.
Which are the biggest 5 electronic components sector stocks in India ?
Comparing by market capitalization as on November 25, 2024 the biggest 5 electronic sector stocks are – Honeywell automation, Syrma SGS, Cyient DLM, Centrum Electronics and Kernex microsystems.
Why are electronics sector stocks down ?
This is happening because the quarterly profits of these companies are declining. This might be due to rising prices of raw materials globally due to various factors like interest rates etc.
