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Semiconductor Stocks in India: There are various sectors that have come into the limelight in the last few years. One of them is the semiconductor industry. The reason could be attributed to the high demand and global shortage that is still ongoing worldwide.

In this article, we will take a look at the overview of the industry and the top semiconductor stocks in India. Keep reading to find out!

The semiconductor Industry – an Overview

The pandemic disrupted the global semiconductor industry. It led to a shortage of semiconductors worldwide. Despite the economic downturn, the global semiconductor industry remained resilient with revenue growth of 6.5% to reach the $440bn mark in 2020.

Semiconductors are components needed for manufacturing cars, televisions, refrigerators, washing machines, personal computers, laptops, mobiles, etc. Semiconductors play an important role in a variety of fields.

Currently, India imports almost all the semiconductors it needs. Its demand is estimated to reach around US$100 bn by 2025 from about US$24 bn in 2021. The investments in India’s semiconductor capacity are, expected to grow 4-fold in the next few decades. 

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To boost the industry, the government has passed a ₹76,000 crore ($10 billion) production-linked incentive (PLI) scheme for semiconductors, which will strengthen India’s manufacturing base in making semiconductor chips.

How Will PLI Scheme Help Semiconductor Industry?

India was facing an inadequate supply of semiconductor chips in the global market which has severely affected the supply of a number of goods such as cars, laptops, and phones.

To combat this,  the Centre sanctioned ₹76,000 crores under the production-linked incentive (PLI) scheme, under which Rs.2.3 lakh crore of incentives will be given,  to encourage the manufacturing of semiconductors within India. 

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How will it help the companies?

The primary goal of introducing the scheme is to create a semiconductor ecosystem in the country. It will provide financial assistance in form of subsidies to the manufacturers of semiconductors.

This will help them bring down their production costs. In turn, the companies will be encouraged to produce more as their profits will increase. It will also allow the companies to have additional capital in the hand during these uncertain times which can be utilized for other purposes. 

How will it help the economy?

The move came when the global semiconductor industry was facing a crisis. The strategic timing will benefit the overall economy.  In fact, the government estimates that the scheme will lead to the creation of 35,000 specialized jobs apart from 1 lakh indirect employment opportunities.

In addition to that, it could also generate investments to the tune of Rs 1.7 lakh crore. 

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Top Semiconductor Stocks in India

Here are the best companies and top semiconductor stocks in India:

Semiconductor stock #1 – Vedanta Limited

Face Value (₹): 1Net Profit Margin: 17.08
Market Cap (Cr):₹119,378CrCurrent Ratio:0.95
Promoter’s Holdings (%):69.69Debt to Equity:1.05
Stock P/E (TTM): 6.35ROE (%):25.81
EPS (₹): 51Dividend Yield (%):14.01

Source: Trade Brains Portal (Last Updated – 20 May 2022)

Vedanta Limited, formerly known as  Sterlite industries, is an Indian multinational mining company. It is one of the world’s leading Oil & Gas and Metals companies with significant operations in Oil & Gas, Zinc, Lead, Silver, Copper, Iron Ore, Steel, and Aluminium & Power across India, the South Africa, and Namibia.

They recently announced that the company in partnership with Foxconn will set up a semiconductor manufacturing plant in the next two years. This comes as a second attempt of Vedanta to enter the semiconductor space after its earlier plan to set up a display unit with about Rs 60,000 crore investment could not take off.

In FY21, the company recorded sales of Rs 88,021 Cr in FY21. In the same years, the company also posted a net profit of Rs 11,602 Cr which is an increase as the company incurred losses in the year before that. Apart from that, the company has been paying high dividends and thus has a rising dividend yield. The company has a high debt-to-equity ratio of 1.05.

Semiconductor Stock #2 – ASM Technologies Ltd

Top Semiconductor Stocks in India - ASM technologies
Face Value (₹): 10Net Profit Margin: 6.26
Market Cap (Cr): ₹539CrCurrent Ratio: 1.73
Promoter’s Holdings (%): 61.84%Debt to Equity: 0.55
Stock P/E (TTM): 38.80ROE (%): 16.04
EPS (₹): 13Dividend Yield (%): 1.32

Source: Trade Brains Portal (Last Updated – 20 May 2022)

ASM Technologies Ltd is an India-based holding company. The company serves the market of India, Singapore, the US, the UK, the Middle East, and Japan. ASM has the expertise and understanding of design and development of System and Sub Systems of PVD, CVD, RTP, Etch, CMP, and Inspection tools.

In their semiconductor business, it is in the process of developing a Modular Transfer Chamber (MTC) to enhance the productivity of packaging and a  Vaccum Cassette Unit to carry wafers in a vacuum environment.

The main clients of the company include reputed customers involved in the manufacturing of semiconductor equipment and network devices. It is in the process of expanding its service offerings and has recently forayed into areas of virtual reality (VR), the internet of things (IoT), and open edX platform management.

The fundamentals of the company are growing as they recorded a net profit of Rs 8.51 Crore in FY21 which was up by 585% from the same period last year. It earned a revenue of Rs 137.39 Cr.

The promoter’s holdings stand at 61.84% with Zero shares pledged.  The Company has seen growing costs YoY for long-term projects which can be a reason for concern.

Semiconductor Stock #3 – Moschip Technologies Ltd

Semiconductor Stocks in India - moschip
Face Value (₹): 2Net Profit Margin: -8.7
Market Cap (Cr): ₹929CrCurrent Ratio: 0.65
Promoter’s Holdings (%): 55.31%Debt to Equity: 1.27
Stock P/E (TTM): 144.02ROE (%): -16.71
EPS (₹): 0Dividend Yield (%): 0

Source: Trade Brains Portal (Last Updated – 20 May 2022)

MosChip Semiconductor Technology is the first Fabless Semiconductor company publicly traded in India. It specializes in product design and development services ranging from Chip Design to Systems Development.

It has a presence in sectors like aerospace and defence, consumer electronics, audio and video, networking and telecommunications, mobile electronics, security, and software development. 

The company is focused on Semiconductor design services, Mixed Signal IP, Turn-key ASIC solutions, and Embedded product design services.

It has designed and developed 20+ different products in connectivity and shipped more than 10 million chips to its clients including Toshiba, Hitachi, Sony, IBM, and Volvo. It is also engaged in the business of Sales to External Customers.

Moschip earned a revenue of Rs 105.19 Cr in FY21 however posted a net loss of Rs 9.15 Crores. Some of the red flags are the decrease in Promoter shareholding by 1% and a High PE ratio with Negative Return on Equity (ROE).

On the bright side, the company has been able to generate strong cash flow from its core business over the last 2 years and the promoter pledge is Zero.

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Semiconductor Stock #4 – SPEL Semiconductor Ltd

Semiconductor Stocks in India - SPEL
Face Value (₹): 10Net Profit Margin: -54.23
Market Cap (Cr): ₹261CrCurrent Ratio: 1.06
Promoter’s Holdings (%): 59.17%Debt to Equity: 0.42
Stock P/E (TTM): 0ROE (%): -11.43%
EPS (₹): -3Dividend Yield (%): 0

Source: Trade Brains Portal (Last Updated – 20 May 2022)

Natronix’s India OSAT facility is SPEL Semiconductor Limited. It is engaged in offering electronic integrated circuits (ICs). SPEL is India’s first & only Semiconductor IC Assembly & Test Facility. 

It provides full turnkey solutions that include Wafer sort, Assembly, Test, and Drop-shipment services which help Customers accelerate time-to-revenue for their new products. 

They also offer packaging solutions for semiconductors used in a range of end-market applications, including communications, consumer electronics, computing, industrial and automotive. Its Customers are some of the biggest Integrated Device Manufacturers (IDMs) and Fabless Companies in the United States, Asia, and Europe. 

The company earned a standalone revenue of Rs 15.92 Cr and reported a net loss of Rs 8.63 Cr in FY21. The company is seeing an increasing trend in earnings from its non-Core operations which can be a threat. On the other hand, the promoter’s holding accounted for 59.17% and with Zero Promoter Pledge. 

Semiconductor Stock #5 – Ruttonsha International Rectifier Ltd

Semiconductor Stocks in India - Ruttonsha
Face Value (₹): 10Net Profit Margin: 4.43
Market Cap (Cr): ₹192CrCurrent Ratio: 3.47
Promoter’s Holdings (%): 71.75%Debt to Equity: 0.15
Stock P/E (TTM): 76.18ROE (%): 6.23
EPS (₹): 4Dividend Yield (%): 0

Source: Trade Brains Portal (Last Updated – 20 May 2022)

The Product range of the company includes Power semiconductors, Phase Control Thyristors, Standard Recovery Diodes, Fast Turn-Off Thyristors, Fast Recovery Diodes, and Power Modules (Thyristor/Thyristor, Diode/Diode, Diode/Thyristor), Bridge Rectifiers, and Water Cooled Assemblies.

It is a major supplier to manufacturers of Welding Rectifiers, Battery Chargers, and Electroplating rectifiers. The net profit of the company stood at Rs 1.33 Cr and revenue was at Rs  30.07 Cr for FY21.

The company has a very strong promoter holding summing up to 71.8% and Zero Promoter Pledge. However, it must be noted that the company has not been able to generate adequate cash flows over the last years.

Semiconductor Stock #6 – Tata Elxsi

tata elxsi logo
Face Value (₹): 10Net Profit Margin: 20.16
Market Cap (Cr): ₹51,436CrCurrent Ratio: 5.26
Promoter’s Holdings (%): 44.08%Debt to Equity: 0
Stock P/E (TTM): 93.58ROE (%): 30.15
EPS (₹): 88Dividend Yield (%): 0.51

Source: Trade Brains Portal (Last Updated – 20 May 2022)

Tata Elxsi Ltd is the product design arm of the multi-billion Tata Group. It is amongst the world’s leading providers of design and technology services across industries including Automotive, Broadcast, Communications, Healthcare, and Transportation.

Last year the company showcased its ambitious plan to foray into the semiconductor manufacturing industry. The Tata group is in talks with the state governments of Tamil Nadu, Karnataka, and Telangana to invest US$300 Million to set up new semiconductor assembly and testing units.

The group is also in talks with major international companies, including those from Taiwan, for its semiconductor chip business.

On the financial front, Tata Elxsi earned Rs 1,826.16 as revenue and Rs 368.12 Cr in FY21. The promoter’s holding is 44.32% and the promoter’s pledge is zero. Despite being present in various segments, the company is not able to generate adequate cash flow.

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List of all Semiconductor Stocks in India

CompanyMarket Cap (Rs in Crores)
Vedanta Ltd.121,254
Tata Elxsi Ltd.40,275
Moschip Technologies Ltd.1,355
ASM Technologies Ltd.691
SPEL Semiconductor Ltd.361
Ruttonsha International Rectifier Ltd.243

In closing

In this article, we looked at the top semiconductor stocks in India. The use of semiconductors in various industries has increased its demand multifold over the last few years.

Adding to that, the high internet penetration and proliferation of smart devices are contributing to the semiconductor market growth. This can be a good opportunity for investors to invest in the sector. That’s all for this article. Happy Investing!

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