Union Budget 2025: Top 5 semiconductor stocks to watch for potential gains

India’s semiconductor industry is at a crucial juncture as Budget 2025 is expected to drive new incentives for local manufacturing and research & development (R&D). With the government’s push through the India Semiconductor Mission (ISM) and Production Linked Incentive (PLI) scheme, key semiconductor stocks could witness strong momentum ahead of the budget. Here are five stocks to consider based on their market position, growth potential, and recent developments.

1. Bharat Electronics Limited (BEL)

A leading player in India's electronics and semiconductor ecosystem, BEL operates under the Ministry of Defence and has been expanding beyond defence applications. The company’s focus on avionics, electronic warfare, and satellite integration aligns with the government’s indigenization efforts. BEL has consistently reported strong financials, with a revenue of Rs 17,333 crore in FY24 and a net profit of Rs 3,984 crore. The budget’s focus on boosting domestic semiconductor capabilities could provide further tailwinds for BEL.

2. CG Power and Industrial Solutions Limited

Formerly known as Crompton Greaves, CG Power is a key supplier of power and industrial solutions, including semiconductor-related products such as transformers and electrical components. The company has reported a revenue of Rs 7,852 crore in FY24, reflecting strong demand from infrastructure and industrial projects. With the government’s emphasis on expanding semiconductor infrastructure, CG Power stands to gain from increased investments in power distribution and industrial automation.

3. HCL Technologies

A major IT services provider, HCL Technologies has entered the semiconductor space by offering chip design and engineering services. The company reported a revenue of Rs 1.13 lakh crore in FY24 and has been collaborating with global semiconductor firms. With India's push towards local semiconductor design and AI-driven chip development, HCL Technologies could benefit from increased R&D funding and strategic partnerships.

4. Vedanta Limited

Vedanta has been at the forefront of India’s semiconductor ambitions, with a plan to establish a $20 billion chip manufacturing facility. Although its initial partnership with Foxconn did not materialize, the company remains committed to semiconductor investments, securing government approvals for its projects. With Budget 2025 expected to introduce further incentives for semiconductor fabs, Vedanta could see renewed investor interest.

5. Hitachi Energy India Limited

Hitachi Energy specializes in power and semiconductor technologies, supplying high-performance electrical components for industrial and automotive applications. The company has shown strong growth, with revenue reaching Rs 5,921 crore in FY24. Given India's focus on electric mobility and renewable energy, Hitachi Energy is well-positioned to capitalize on government incentives aimed at compound semiconductors for EVs and power electronics.

As India accelerates its semiconductor ecosystem development, Budget 2025 is expected to provide key policy support. Stocks like BEL, CG Power, HCL Technologies, Vedanta, and Hitachi Energy stand to gain from increased investments in local manufacturing, R&D, and semiconductor infrastructure. Investors should closely watch budget announcements for policy updates that could drive further growth in these stocks.