SYNOPSIS: India’s ISM 2.0 initiative strengthens the semiconductor ecosystem, highlighting select stocks with over 20 percent RoE and RoCE, backed by solid financial performance and expanding opportunities across the semiconductor value chain.
The Union Budget 2026-27 marked a significant step forward in India’s technology roadmap with the launch of the India Semiconductor Mission (ISM) 2.0. This next phase reflects a stronger policy commitment to building robust domestic semiconductor capabilities, especially at a time when semiconductors form the backbone of critical digital infrastructure and industrial ecosystems.
ISM 2.0 is aimed at strengthening the entire semiconductor value chain within India. The initiative will prioritise domestic manufacturing of semiconductor equipment and materials, development of end-to-end indigenous semiconductor intellectual property, and the reinforcement of both local and global supply chains to enhance resilience and competitiveness.
An allocation of Rs. 1,000 crore has been earmarked for ISM 2.0 in FY26-27. The program places particular emphasis on industry-driven research initiatives and the establishment of advanced training centres to accelerate technological innovation and develop a highly skilled, future-ready workforce. Listed below are some notable semiconductor stocks that currently have a high RoE and RoCE of more than 20 percent:
CG Power & Industrial Solutions Limited
With a market cap of Rs. 1.14 lakh crores, the stock closed in the red at Rs. 724.95 on BSE, down by around 0.2 percent on Friday. In Q3 FY26, the company reported a consolidated revenue from operations of Rs. 3,175 crores, a growth of around 9 percent QoQ and 26 percent YoY. Likewise, its net profit for the quarter stood at Rs. 284 crores, representing a growth of more than 19 percent YoY but stable on a quarter-on-quarter basis.
In terms of financial ratios, CG Power currently has a Return on Equity (RoE) of 27.7 percent, and Return on Capital Employed (RoCE) of 37.5 percent, with a debt-to-equity ratio of 0.02.
CG Power and Industrial Solutions Limited is an engineering conglomerate and a leader in the Electrical Engineering Industry, and a part of the Murugappa Group. The company, along with its subsidiaries and associates, is a global enterprise providing end-to-end solutions to utilities, industries and consumers for the management and application of efficient and sustainable electrical energy and semiconductor business. It offers products, services and solutions in three main business segments, viz. Power Systems, Industrial Systems and Semiconductors.
CG Power signed a definitive agreement with Japan-based Renesas Electronics and initiated the acquisition of its Radio Frequency Components (RFC) business for $36 million. October 2024 marked CG’s entry into the semiconductor design space, with the incorporation of Axiro Semiconductor Private Limited. Meanwhile, its other subsidiary, CG Semi Private Limited, is developing an Outsourced Semiconductor Assembly and Test (OSAT) facility.
In August 2025, CG Power announced that its subsidiary, CG Semi Private Limited, had inaugurated its first outsourced semiconductor assembly and test (OSAT) facility in Sanand, Gujarat. The project has been developed with support from both central and state governments and in collaboration with Renesas Electronics Corporation and Stars Microelectronics.
CG Semi has committed an investment of over Rs. 7,600 crore over the next five years to establish two advanced facilities, G1 and G2, at Sanand, further expanding India’s semiconductor manufacturing infrastructure.
HCL Technologies Limited
With a market cap of Rs. 3.77 lakh crores, the stock closed in the green at Rs. 1,390.2 on BSE, up by over 1 percent on Friday. For the quarter, the company posted a revenue from operations of Rs. 33,872 crores, reflecting a sequential growth of around 6 percent QoQ compared to Rs. 31,942 crores in Q2 FY26. Likewise, on a year-on-year basis, revenue grew nearly 13 percent from Rs. 29,890 crores recorded in Q3 FY25.
Net profit for the quarter stood at Rs. 4,082 crore, indicating a decrease of around 4 percent QoQ from Rs. 4,236 crores in Q2 FY26, as well as a fall on a year-on-year basis by nearly 11 percent from Rs. 4,594 crores reported in Q3 FY25.
In terms of financial ratios, HCLTech currently has a Return on Equity (RoE) of 25 percent, Return on Capital Employed (RoCE) of 31.6 percent, with a debt-to-equity ratio of 0.1.
HCL Technologies Limited, a leading global IT services company, is engaged in providing an integrated portfolio of services, including software-led IT solutions, remote infrastructure management, engineering and R&D services and BPO.
In the financial year 2001-02, the company diversified its capabilities and expanded its footprint to medical devices, aerospace and defence, semiconductor, manufacturing, financial services and retail industries. It strengthened its position in the semiconductor industry via the Samsung Foundry alliance and Virtual Design Partner (VDP) qualification.
The company’s strategic partnerships with leading OEMs, fabs and chip companies help address industry challenges with a comprehensive suite of solutions spanning mechanical and electrical engineering, software development and semiconductor design. Further, HCLTech offers end-to-end semiconductor manufacturing services tailored to diverse client needs, with quality assurance and testing at every step.
Trident Techlabs Limited
With a market cap of Rs. 337 crores, the stock hit a 5 percent upper circuit on NSE and closed in the green at Rs. 195 on Friday. In H1 FY26, the company reported a consolidated revenue from operations of Rs. 64 crores, an impressive growth of around 14 percent HoH and 204 percent YoY. Likewise, its net profit for the quarter stood at Rs. 11 crores, representing a rise of more than 37 percent HoH and 266 percent YoY.
In terms of financial ratios, Trident currently has a Return on Equity (RoE) of 22 percent, Return on Capital Employed (RoCE) of 26.7 percent, with a debt-to-equity ratio of 0.26.
Trident Techlabs Limited is an engineering solutions company engaged in the business of providing advanced technology products and services across engineering design, test and measurement, simulation, and electronic system development. It collaborates with leading global technology partners to deliver specialised solutions in areas such as electronics and semiconductor design, engineering simulation, and product development.
Meanwhile, its subsidiary Techlabs Semiconductor Private Limited is one of the leading providers of semiconductor services offering comprehensive endto-end solutions across design, verification, validation, testing, manufacturing and AI. It serves a diverse range of industries, including consumer electronics, automotive, telecommunications, defence, armed forces and industrial automation.
Tata Elxsi Limited
With a market cap of Rs. 28,110.3 crores, the stock closed in the green at Rs. 4,512.4 on BSE, up by around 0.13 percent on Friday. In Q3 FY26, the company reported a revenue from operations of Rs. 953 crores, a marginal growth of around 4 percent QoQ and 1.5 percent YoY. However, its net profit for the quarter stood at Rs. 109 crores, representing a decline of about 30 percent QoQ and 45 percent YoY.
In terms of financial ratios, Tata Elxsi currently has a Return on Equity (RoE) of 29.3 percent, Return on Capital Employed (RoCE) of 36.3 percent, with a debt-to-equity ratio of 0.06.
Tata Elxsi Limited provides product design and engineering services to the consumer electronics, communications & transportation industries and systems integration and support services for enterprise customers. It also provides digital content creation for the media and entertainment industry.
In addition to the Transportation, Media & Communication, and Healthcare sectors, the company started to win engagements in semiconductor, defence and aerospace verticals during 2024-25.
Tata Elxsi aims to deliver end-to-end semiconductor solutions, combining chip design, embedded software, AI accelerators, and functional safety. It covers most of the semiconductor value chain elements with strength across chip design, embedded software, and more.
At the same time, part of the group company Tata Electronics’ semiconductor fabrication facility in Dholera Special Investment Region (SIR) represents a landmark investment of over Rs. 91,000 crore and is designed with a planned capacity of 50,000 wafer starts per month (WSPM). The Government of India, under the India Semiconductor Mission, has committed to providing 50% fiscal support on a pari-passu basis for eligible project costs, underscoring its strong commitment to developing a globally competitive semiconductor manufacturing ecosystem within the country.
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