India’s semiconductor ambitions are beginning to reflect in corporate strategies. While large-scale chip fabrication is still a few years away, several listed players are quietly building capabilities across the broader value chain—from equipment manufacturing to OSAT and embedded design services.
Companies are making early bets in this space, either through joint ventures, capital investments, or diversification into semiconductor-linked businesses. Their current revenues may not be driven by semiconductors yet, but the direction is becoming increasingly clear.
On similar lines, here are three stocks that may ride the semiconductor momentum in the years ahead…
#1 Kaynes Technologies
Kaynes Technologies is an electronics manufacturing company, providing design, process, engineering, integrated manufacturing, and life-cycle support to original equipment manufacturers.
It is a leading integrated and IoT-enabled solutions provider, with capabilities across the entire spectrum of Electronic System Design & Manufacturing (ESDM). The company caters to multiple industry verticals, including automotive, aerospace, defence, and railways.
Moves into OSAT and HDI PCB manufacturing
The company is also entering into the Outsourced Semiconductor Assembly and Test (OSAT) and High-Density Interconnect (HDI) Printed Circuit Boards (PCB) businesses.
It received approval last September for setting up an OSAT facility in Gujarat with an ₹33 billion investment. The central government will contribute 50% of the investment, while 20% will come from the Gujarat Government, and 30% from the company.
The facility will deliver 6.3 million chips per day, and is expected to provide initial sample collection by August. Production is slated to start from Q4FY26, with a marginal revenue contribution initially, and scale-up expected from FY27 onwards.
It has also secured a multi-year agreement with Alpha Omega Semiconductor, a power domain player, to provide packaging and testing services. This customer will consume 60% of the OSAT capacity.
Healthy revenue mix and margin improvement
Coming to its financials, revenue increased 52% year-on-year (YoY) to ₹27 billion, while net profit rose 60% to ₹2.9 billion. The company gets 43% of its revenue from Printed Circuit Board Assembly (PCBA) and 39% from box build.
The rest comes from Original Design Manufacturing (ODM) and IoT solutions.
Industrial and EV segments contribute 55% to revenue, followed by automotive (26%), Internet of things (IoT) (8%), and railways (7%). Medical and aerospace currently contribute a combined minimum of 3%. Its margin expanded 101 basis points (bps) to 15.1%.
Its financial growth has been driven by a rising asset base, with gross block more than doubling to ₹79 billion, from ₹36.8 billion last year. However, asset turnover declined to 3.4x from 4.9x, as the newly added capacity is yet to fully scale up.
As of March 31, 2025, its order book stood at ₹66 billion, providing revenue visibility of over 2 years as per FY25. Kaynes expects its revenue to grow 60% to ₹43.5 billion in FY26. Also, its margins are expected to improve by 50 bps to 15.6%.
It trades at a price-to-equity multiple of 131x, a premium to the 2.5-year median of 118x.
#2 CG Power
CG Power is a part of the Murugappa Group and is a leader in the electrical engineering industry. The company operates in two business lines: Industrial Systems and Power Systems. It manufactures traction motors, propulsion systems, signaling relays, and other components for Indian Railways.
Additionally, it manufactures induction motors, drives, transformers, switchgear, and other products for the industrial and power sectors. It has also forayed into the consumer appliance market, offering products such as fans, pumps, and water heaters.
It is also setting up an OSAT facility in Gujarat at an investment of ₹76 billion. The project is a joint venture with Renesas Electronics Corporation (Japan) and Stars Microelectronics (Thailand).
The mini plant is expected to be operational by FY26, and product production will begin at least a year later. But the project is expected to take another few years to become fully operational.
Strong performance across segments in FY25
In FY25, revenue from the industrial segment grew 16% YoY to ₹58 billion. The industrial segment accounts for 59% of revenue, with the remaining 41% coming from the power segment. However, the power business is more profitable, with margins of 20% compared to 12.8% in the industrial segment.
Profit before interest and tax (PBIT) in the industrial segment declined 5%, while margins fell 280 bps to 12.8%. Rising commodity prices and increased investments in the consumer business contributed to the margin contraction.
On the other hand, the power sector revenue rose strongly by 35% to ₹35 billion. Margins also rose 280 bps to 21.1%, driven by better price realization and operating leverage. As a result, PBIT grew 57% to ₹7.1 billion.
At the consolidated level, revenue rose 23% to ₹99 billion, driven by both segments. However, overall margins declined slightly by 50 bps to 14.8%, mainly due to pressure in the industrial business. Net profit (before exceptional items) rose 15% to ₹9.7 billion.
Strong order book supports growth outlook.
Looking ahead, CG Power aims to maintain a robust growth rate, supported by a strong order book, which provides visibility into revenue growth. The total order book stood at ₹146.8 billion (up 40% YoY), providing revenue visibility for about 1.5 years on FY25 revenues.
The company is expected to benefit from the expanding power transformer market. It is investing ₹7.1 billion to set up a 45,000 megavolt-ampere transformer manufacturing unit. With this expansion, CG Power aims to cater to growing domestic and export demand, further strengthening its market position.
The company trades at a price-to-equity (P/E) multiple of 106x, well-above its 10-year median of 75x.
#3 ASM Technologies
ASM Technology is an IT company that provides consulting and product development services in engineering and product research and development. The company caters to diverse industries such as semiconductors, hi-tech, and medical equipment.
Expanding into semiconductor manufacturing
Its services include prototyping, testing, and pilot production, value engineering, and hardware and software design of embedded systems. ASM is also expanding into virtual reality, IoT, and Open edX platform management.
The company has a joint venture with Hind High Vacuum (HHV) Group for manufacturing semiconductor/solar equipment-related systems and sub-systems. It has set up India’s first semiconductor-focused equipment manufacturing unit.
The company also plans to invest ₹5.1 billion to expand its Electronic System Design and Manufacturing (ESDM) capabilities. A Memorandum of Understanding (MoU) has been signed for this purpose.
Valuations stretched despite improving performance
Though its revenue has grown consistently, net profit has lagged. In FY25, revenue rose 44% to ₹2.9 billion, and the company posted a profit of ₹0.25 billion. It had made a loss of ₹70 million last year.
Its Return on Equity (RoE) and Return on Capital Employed (RoCE) stand at 16.5% and 19.6%, respectively. It trades at a P/E of 127x, well above its 10-year median of 43x.
Conclusion
While none of these companies are pure-play semiconductor firms, their investments and partnerships show a clear intent to participate in India’s semiconductor push. As the ecosystem evolves, these early moves could help them tap into long-term opportunities, though valuations already seem to be pricing in a fair bit of optimism.
Disclaimer:
Note: Throughout this article, we have relied on data from http://www.Screener.in and the company’s investor presentation. Only in cases where the data was not available have we used an alternate but widely used and accepted source of information.
The purpose of this article is only to share interesting charts, data points, and thought-provoking opinions. It is NOT a recommendation. If you wish to consider an investment, you are strongly advised to consult your advisor. This article is strictly for educational purposes only.
About the Author: Madhvendra has been deeply immersed in the equity markets for over seven years, combining his passion for investing with his expertise in financial writing. With a knack for simplifying complex concepts, he enjoys sharing his honest perspectives on startups, listed Indian companies, and macroeconomic trends.
A dedicated reader and storyteller, Madhvendra thrives on uncovering insights that inspire his audience to deepen their understanding of the financial world.
Disclosure: The writer and his dependents do not hold the stocks discussed in this article.
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