Dixon Tech & other semiconductor stocks with net profit CAGR of up to 160% to keep on your radar

In 2024, India’s semiconductor industry made notable progress with the announcement of the country’s first semiconductor fabrication unit, along with several Assembly, Testing, Marking, and Packaging (ATMP) and Outsourced Semiconductor Assembly and Test (OSAT) facilities. 

With investments surpassing Rs. 1.26 lakh crore, India is becoming an attractive destination for global semiconductor investments. The Indian semiconductor market is valued at around $41.2 billion and is expected to grow at a CAGR of around 19 percent.

Following are a few semiconductor stocks with high net profit CAGR of up to 160 percent to keep in your watchlist: 

1. Dixon Technologies (India) Limited 

With a market cap of Rs. 85,312.5 crores, the stock moved up by nearly 2 percent on BSE to Rs. 14,290.9 on Tuesday. Further, the net profit of Dixon Tech increased by a CAGR of nearly 33 percent to Rs. 375 crores in FY24, as against Rs. 160 crores in FY21.

Incorporated in 1993, Dixon Technologies is primarily involved in the manufacturing of electronic goods such as consumer durables, home appliances, lighting products, mobile phones, refrigerators, telecom products, hearables & wearables, and security devices. 

The company has multiple partnerships and subsidiaries with various investments underway to start full-fledged operations for semiconductors. It uses semiconductors in the assembly of devices like mobile phones, ACs, and fridges. The company partners with HKC Corporation Limited and Rexxam for manufacturing semiconductor production equipment. 

2. Adani Enterprises Limited 

With a market cap of Rs. 2.74 lakh crores, the stock moved up by nearly 2 percent on BSE to Rs. 2,155.45 on Tuesday. Further, the net profit of Adani Enterprises increased by a CAGR of nearly 47 percent to Rs. 3,335 crores in FY24, as against Rs. 1,046 crores in FY21.

Adani Enterprises has revised its capex plans for the fiscal year 2024-25. Initially, the company projected a capex of Rs. 92,000 crore, which was later adjusted to Rs. 80,000 crore in May 2024. As of November 2024, this estimate was further reduced to Rs. 67,000 crore, primarily due to an extended monsoon season that disrupted project timelines. 

Last year, the Maharashtra cabinet panel approved a $10 billion (Rs. 83,947 crores) investment proposal by a joint venture between Israel’s Tower Semiconductor and Adani Group to establish a semiconductor chip manufacturing unit at Taloja, Panvel. 

Situated in the Navi Mumbai suburbs of Raigad district, the proposed facility will start with a capacity of 40,000 wafer starts per month (WSPM) in its first phase, with plans for an expansion to 80,000 WSPM. 

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3. Kaynes Technology India Limited 

With a market cap of Rs. 25,907.7 crores, the stock moved up by nearly 1.2 percent on BSE to Rs. 4,183.95 on Tuesday. Further, the net profit of Kaynes Technology increased by a CAGR of nearly 163 percent to Rs. 183 crores in FY24, as against Rs. 10 crores in FY21.

Kaynes Technology India Limited is primarily engaged in the design and manufacturing of advanced electronic modules and solutions catering to a wide range of industries. It is well-positioned to benefit from growth in ESDM, semiconductor, and PCB markets. 

Kaynes’ order book increased significantly from Rs. 5,422.8 crores in Q2 FY25 to Rs. 6,047.1 crores in Q3 FY25. A capex of Rs. 4,800 crores is anticipated over the next few years for new projects, with substantial government subsidies expected to help offset cash outflows. The company will focus on expanding its geographical footprint and enhancing its ODM capabilities through targeted acquisitions and investments. 

The management is confident in maintaining EBITDA margins above 15 percent for FY25, with an anticipated increase in operating leverage as new teams contribute to revenue growth. For FY26, revenue is projected to reach Rs. 4,500 crores, with operating margins expected to exceed 15 percent. 

Written by Shivani Singh

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