Last Updated on May 17, 2024 by Anjali Chourasiya
Everyone is aware of the numerous developments in the technology sector. And thanks to the Digital India program, which made the country adapt to technology quickly. Considering the massive demand for digital products, several companies have emerged, creating the most innovative artificial intelligence (AI) solutions in various sectors like health, finance, education, and more. In this article, let’s look into the best AI stocks in India and the industry’s future.
Table of Contents
What is Artificial Intelligence (AI)?
AI is an intelligent system capable of completing tasks accurately and quickly. This need not require the intervention of human intellect. So, a system with AI can make choices on your behalf. A few examples of AI are Google Maps, face recognition unlocking on your phones, chatbots, Email (categorising spam messages), intelligent vehicles, and many more.
From starting our day by unlocking the phone using facial recognition to asking Siri or Alexa for weather updates or navigation, we all widely use artificial intelligence in our daily lives.
Overview of AI Industry
India’s AI industry, a blend of startups and tech giants, is on the rise, backed by government support with a proposed Rs 10,000 crore AI plan. Post-COVID, 54% of companies have embraced AI to enhance operations, according to a PwC survey. India, contributing 16% to the global AI talent, is poised for a 20% market growth over five years, as per a Microsoft-IAMAI study. This growth is fueled by tech leaders and AI-focused firms innovating and collaborating on AI solutions.
What are AI Stocks?
Numerous publicly traded Indian tech firms have recognised the opportunities presented by AI. They’ve responded by either establishing new AI-focused departments within their organisations or forming partnerships with international entities to secure a share of the AI market.
Additionally, it’s anticipated that many startups will go public in the near future to secure funding for their operations and provide returns to their investors.
Investments in AI stocks are directed towards the advancement of AI technology or its application across different sectors.
Best AI Stocks in India (2024)
| Name | Sub-Sector | Market Cap (Rs. in cr.) | Close Price (Rs.) | PE Ratio | 1Y Return (%) | Net Profit Margin (%) | 5Y CAGR (%) |
| Zensar Technologies Ltd | IT Services & Consulting | 13,024.61 | 574.70 | 19.59 | 114.48 | 13.14 | 19.88 |
| Oracle Financial Services Software Ltd | Software Services | 61,914.30 | 7,143.05 | 27.90 | 108.92 | 33.05 | 15.14 |
| Kellton Tech Solutions Ltd | IT Services & Consulting | 969.15 | 99.50 | -7.64 | 90.43 | -13.79 | 16.79 |
| Cyient Ltd | Software Services | 21,047.68 | 1,914.95 | 30.83 | 65.42 | 9.47 | 26.80 |
| Bosch Ltd | Auto Parts | 85,239.72 | 28,901.05 | 59.80 | 53.92 | 9.25 | 9.94 |
| Persistent Systems Ltd | Software Services | 52,070.78 | 3,430.35 | 47.62 | 53.41 | 10.99 | 60.68 |
| Saksoft Ltd | IT Services & Consulting | 2,856.24 | 283.55 | 34.84 | 35.96 | 12.14 | 58.49 |
| Affle (India) Ltd | Advertising | 14,934.43 | 1,065.95 | 61.06 | 18.04 | 16.43 | – |
| Tata Elxsi Ltd | Software Services | 44,178.28 | 7,093.90 | 55.76 | 13.12 | 21.56 | 50.22 |
Note: The data of best AI stocks in India is as of 25th April 2024. The stocks are sorted according to their 1-yr return.
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Among 500+ smallcases, here’s the top smallcases you can check out:
Disclosure for Omni AI-Tech Global – Artificial Intelligence
Disclosure for House of Tata
Note: The smallcases are mentioned only for educational purposes and are not meant to be recommendatory. Investors must conduct their own research and consult a financial expert before making any investment decisions.
Overview of the Top AI Stocks in India
Zensar Technologies Ltd
Zensar Technologies is a software and infrastructure services company providing various information technology services and solutions. The company, as of 26th April 2024, had a market capitalisation of Rs. 13,024.60 cr. and a stock price of Rs. 574.7. Zensar Technologies Ltd’s 1-yr return is 16.69%, and the net profit margin is 30.12%.
This small-cap AI stock shows promising signs of profitability on Tickertape’s ‘Scorecard,’ and the debt-to-equity ratio has been 13.48%, while the industry average is 13.64%.
Oracle Financial Services Software Ltd
The mid-cap AI stock, Oracle Financial Services Software, provides solutions to the financial services industry. The company offers a suite of banking products catering to the needs of corporate, retail, investment banking, and treasury operations. The company, as of 26th April 2024, had a market capitalisation of Rs. 61,914.29 cr. and a stock price of Rs. 7,143.05. Oracle Financial Services Software Ltd’s 1-yr return is 21.05%, and the net profit margin is 23.58%.
This AI stock generated the highest return of 156.53%. The company’s debt-to-equity ratio is 0.97%, while the industry average is 11.01%.
Kellton Tech Solutions Ltd
The small-cap company Kellton Tech Solutions is a software development company that provides IT solutions, strategic technology consulting, and product development services. As of 26th April 2024, the company’s market capitalisation is Rs. 969.14 cr. and a stock price of Rs. 99.5. Kellton Tech Solutions Ltd’s 1-yr return is 16.22%, and the net profit margin is 32.15%.
In the past year, Kellton Tech Solutions has performed relatively well, but the positive momentum seems to cease, as the company’s profitability score is 5.7 on the Tickertape Scorecard.
Cyient Ltd
Cyient offers software-enabled engineering and geographic information system (GIS) services. The company’s segments include data and network operations, engineering, manufacturing, industrial products, and realisation. As of 26th April 2024, the company’s market capitalisation is Rs. 21,047.68 cr. and a stock price of Rs. 1,914.95. Cyient Ltd’s 1-yr return is 23.29%, and the net profit margin is 20.20%.
This small-cap AI stock is showcasing good signs of profitability on the Tickertape ‘Scorecard’, as a result, the price upside of this stock is 20.34%, which you can view under ‘Forecast & Ratings’.
Bosch Ltd
The large-cap company Bosch is involved in the manufacturing and trading of automotive products. They are a leading supplier of technology and services in mobility solutions, industrial technology, consumer goods, and energy and building technology.
The company, as of 26th April 2024, had a market capitalisation of Rs. 85,239.71 cr. and a stock price of Rs. 28,901.05. Bosch Ltd’s 1-yr return is 35.82%, and the net profit margin is 28.08%. In the last 5 yrs, the company’s debt-to-equity ratio has been 0.5%, while the industry average is 73.51%.
Persistent Systems Ltd
The software service provider Persistent Systems is involved in building software products. The company offers complete product life cycle services. The company, as of 26th April 2024, had a market capitalisation of Rs. 52,070.77 cr. and a stock price of Rs. 3,430.35. Persistent Systems Ltd’s 1-yr return is 23.34%, and the net profit margin is 64.65%.
The company is showing promising signs of profitability as its market share has increased exponentially from 11.78% to 15.08% in the last 5 yrs.
Saksoft Ltd
The small-cap IT company Saksoft offers business intelligence, testing, and software solutions across various industries and verticals. On 26th April 2024, the company’s market capitalisation was Rs. 2,856.23 cr. and a stock price of Rs. 283.55. Saksoft Ltd’s 1-yr return is 26.37%, and the net profit margin is 21.13%.
Despite recording 7.4/10 on profitability, the company has a moderate number of red flags, which can dampen the mood around this company’s growth.
Affle (India) Ltd
The mid-cap stock Affle provides marketing consulting services. The company uses a consumer intelligence platform that delivers user engagement and transactions through mobile advertising. On 26th April 2024, the company’s market capitalisation was Rs. 14,934.43 cr. and a stock price of Rs. 1,065.95. Affle (India) Ltd’s 1-yr return is 24.03%, and the net profit margin is 20.96%.
This AI stock is showcasing good signs of profitability and growth, which can be reflected in the double-digit price upside.
Tata Elxsi Ltd
Tata Elxsi, the mid-cap stock from Tata Group, is involved in designing and developing computer hardware and software. The company operates in two segments – System integration and support and Software Development and Services.
The company, as of 26th April 2024, had a market capitalisation of Rs. 44,178.28 cr. and a stock price of Rs. 7,093.9. Tata Elxsi Ltd’s 1-yr return is 34.63%, and the net profit margin is 31.12%. With 8.2/10 on profitability, the company has witnessed revenue growth and net income increase in the last 5 yrs.
AI Penny Stocks in India
Among all the stocks listed in the above table, AI penny stock can be Kellton Tech Solutions Ltd. It has a share price of Rs. 99.50 as of 26th April 2024, which is the lowest among its peers in the artificial intelligence sector.
Advantages of Investing in AI Stocks in India
- Growth Prospect: The AI industry in India is expected to experience rapid growth, with projections indicating a significant increase in market size, making it a potentially lucrative investment sector​​​​.
- Diversification: AI stocks offer exposure to various sectors, including healthcare, finance, and technology, which can help diversify investment portfolios and reduce overall risk​​.
- Innovation and Future Potential: Investing in AI stocks means investing in the forefront of technological innovation, with AI playing a crucial role in shaping the future across various industries​​.
Risks of Investing in AI Stocks
- Market Volatility: AI stocks can be susceptible to rapid price fluctuations due to market dynamics, technological advancements, or regulatory changes​​.
- Technological and Competitive Risks: The fast-paced evolution of AI technology means that companies must continuously innovate to stay competitive, posing a risk to investors if a company falls behind​​.
- Regulatory and Ethical Challenges: The AI sector faces potential regulatory changes and ethical considerations, which could impact AI companies’ profitability and operational capabilities​​​​.
Usage of Artificial Intelligence in Other Industries in India
The usage of artificial intelligence across various industries is huge.
- AI can help with data protection, theft protection, and more regarding online security.
- While looking into the education sector, Byju offers learning via AI-powered devices.
- AI robots are already popular in several industries like logistics, healthcare, hospitality, etc.
How to Invest in the Best AI Stocks in India?
Investing in the best AI stocks in India involves a series of strategic steps to identify potential winners in this rapidly advancing field. Here’s how to approach investing in AI stocks in India:
- Identifying Industry Leaders and Innovators
One approach involves identifying companies at the forefront of AI technology. These businesses often lead in areas such as machine learning, natural language processing, and data analytics. Initial reference points might include the top 5 or top 10 AI stocks in India. - Research and Analysis
Thorough research is essential for understanding these companies. Analysis should cover their financial health, growth trajectory, market position, and the sectors they serve, with a specific focus on AI shares and artificial intelligence stocks in India to gauge market scope and potential. - Sector Focus
Certain sectors, such as technology and healthcare, heavily incorporate AI technology. Companies within these sectors that effectively implement AI are generally seen to perform better than their peers. - Market Potential Evaluation
Evaluating the market potential of AI solutions that companies offer is critical. Companies that meet significant market needs or disrupt industries might show substantial growth opportunities. - Diversification
Diversifying investments across various AI companies and sectors could mitigate risks. This includes investing in both established leaders and potentially rewarding AI penny stocks in India. - Regulatory Monitoring
Monitoring regulatory changes related to AI, data privacy, and technology is vital. Such changes can significantly affect the operations and profitability of AI companies. - Using Professional Tools and Services
Utilising professional investment services or tools that specialise in tech and AI stocks can provide deeper insights and help track market trends and company updates. - Long-term Perspective
Given the rapid evolution of the AI field, maintaining a long-term investment perspective is advisable, as companies may need time to fully capitalize on their AI initiatives. - Staying Informed
Keeping informed about technological advancements and industry trends is crucial in the fast-evolving AI landscape, aiding in making informed investment decisions.
Factors to Consider Before Investing in AI Stocks in India
- Financial Strength and Stability: Review the financial health of AI companies, including their balance sheets, cash flow, profitability, and debt-to-equity ratios​​.
- Data Availability: Companies with access to unique and extensive datasets may have a competitive advantage in developing AI solutions​​.
- Tactical Investments and Industry Knowledge: Understand the interplay between AI and other technologies, such as cloud computing, and have a grasp of the industry-specific challenges and opportunities​​.
- Technological Expertise: Familiarise yourself with the technologies that underpin AI, such as machine learning and deep learning, to better assess the potential of AI investments​​.
- Ethical Considerations: Ensure that the AI companies you invest in employ AI in a just and ethical manner, as unethical practices could harm the company’s reputation and, by extension, its stock price​​.
Conclusion
AI has become an integral part of our lives. Considering the demand, many companies and industries have adopted AI in their products and services. While investing, it is essential to look at the market of that particular industry, and in the case of AI, the market seems enormous.However, along with the market, you must also consider your investment objectives and risk appetite and, most importantly, analyse the company you plan to invest in. Use Tickertape Stock Screener to determine the growth potential of a company thoroughly. You can use Scorecard to analyse a company even more wisely. Get started now!
Frequently Asked Questions About AI Stocks in India
Is it profitable to invest in AI stocks in India?
AI is a booming industry. Most of our daily life activities include the usage of AI, and we are getting accustomed to it. Several companies are using AI in their products/systems considering the demand. If you look at the market, AI has good growth potential.
However, for an investment, you must also look at the company you are investing in. Analyse the growth numbers and forecasts of the company before investing. On Tickertape Asset Pages, along with the company’s financials, you can also check the company’s forecasts. These predictive estimates can help you in making an informed decision.
Are AI and robotics the same?
While looking at AI stocks, many investors assume that AI and robots are the same. But it is not true as these two have a few differences. In robotics, robots help humans with their tasks. While in AI, systems are made to copy the human mind. For example, if you watched a thriller series on Netflix, the next time you open Netflix, it recommends thriller series/movies. This is done with the help of artificial intelligence. AI helps you with decision-making, while robots help you with your physical tasks.
What should I consider when investing in AI shares in India?
When investing in AI shares in India, consider the company’s involvement in AI, its market position, and its potential for growth. Additionally, evaluate the company’s innovation in technology, the scalability of its AI solutions, and how it integrates AI with its existing products or services.
Are AI-related stocks in India considered stable for long-term investment?
The stability of AI-related stocks in India is dependent on several factors, such as the company’s ability to integrate AI into operations and products, continue innovation, and maintain competitiveness. The companies that usually manage these aspects well are those with robust R&D capabilities and strategic AI industry partnerships.
What is the volatility level of AI stocks in India?
AI stocks in India are generally quite volatile. This volatility is affected by both local market dynamics and global technological trends. Additionally, these stocks can react to regulatory updates, technological advances, and changes in consumer preferences, which may lead to significant price fluctuations.
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