AI Stocks: Best Artificial Intelligence Stocks in India

The first month of the year 2024 saw India’s first artificial intelligence unicorn taking shape when Krutrim raised $50 million at a valuation of $1 billion. Krutim was launched on December 15, 2023. This shows the rapid rise of the AI industry in India and how well the country is poised to put its stamp on the technology that has taken the world by storm. 

Various reports peg India’s AI market size at less than $1 billion currently, and set to grow at a CAGR of 25-35% to $4 billion by 2029. What is even more promising is the potential of Indian companies to tap into the global market. PricewaterhouseCoopers projects AI to contribute up to $15.7 trillion to the global economy in 2030.  

What are AI Stocks? 

Many listed Indian technology companies have realised the potential AI offers. They have either opened new divisions within their own company or have tied up with global players for a pie of the AI market. Also, one can expect many of the start-ups to soon list on exchanges to raise funds for themselves for their investors. 

AI stocks invest their resources in developing the AI technology itself or its use cases in various fields. 

Top 10 AI Stocks to Invest in India

Here is a list of the top 10 Artificial Intelligence stocks for 2024

1. Tata Consultancy Services 
2. Infosys 
3. Wipro 
4. HCL Technologies 
5. Tata Elexi
6. Tech Mahindra
7. Kellton Tech Solutions 
8. Subex
9. Happiest Mind
10. Saksoft

Performance Overview of Best AI Stocks to Invest

Overview of the Best AI Stocks to Invest in India

Tata Consultancy Services or TCS:  

India’s largest software exporter has launched TCS Studio that facilitates data-driven business decisions, transformation and innovation. It has also trained over 100,000 staff in AI-related technology. 

The stock price is currently above short-, medium- and long-term moving averages as well as near 52-week high. Brokerages have also upgraded the stock in past three months, it has no debt, and has also seen increasing investment from FPIs. On the flip side there is pressure on profit margin.

Infosys:

India’s second largest software exporter, Infosys has launched several initiatives to grab a pie of AI market. The company has currently refused to share any views on AI revenue projections etc but has develop Topaz, its AI solution suite, for clients. 

On the charts, the stock price is above short-, medium- and long-term moving averages as well as near 52-week high. The stock also showed positive breakout above first resistance and has earned upgrades from brokerages. 

Wipro:  

The company has trained over 210,000 of its staff in AI-based skills. Wipro CEO Thierry Delaporte recently said, “Every business line is working to launch new offerings that use AI. That's the way it is at the moment. For example, in our FullStride Cloud business, an area that's particularly hot when it comes to the use of gen AI is digital workplace services. Leveraging gen AI to lighten the load on service desk, deliver faster and better client services is now part of every RFP in this space.”

The company has zero promoter pledge, low debt and its stock price is above short-, medium- and long-term moving averages. The stock has also seen increasing interest from FPIs, leading to upgrades from brokerages. Its, margins, however, have been under pressure lately. 

HCL Technologies:  

The company offers AI Labs as an extension of its Cloud Native Labs focused on building strategic partnerships to deliver AI enablement. It has collaborated with Amazon Web Services to accelerate the adoption of generative artificial intelligence at the company and by enterprises globally. 

The company has very low debt, its stock is near 52-week high and above short-, medium- and long-term moving averages. The book value per share has also been improving for the past two years. The stock also showed positive breakout above first resistance and has earned upgrades from brokerages.

Tata Elxsi:

Another Tata group technology company that is also one of the leaders in India in AI race provides AI-based video analytics, AI DMS, customer experience management services, conversational AI- SymanTEx and TESA - its smart annotation services. 

The stock has been under pressure lately and has seen negative breakdown from third support level. It, however, still has some upgrades from brokerages and seen return on equity improving since last two years. The company has zero promoter pledge and no debt on its books. 

Tech Mahindra:  

The company has launched several AI platforms and solutions such as Sayint -speech analytics platform, Populii - annotation and workflow tool and GAiA - End-to-end CX for building AI ecosystem. 

The company has low debt and no promoter pledge. On the charts, the stock price is above short-, medium- and long-term moving averages as well as near 52-week high. The stock also showed positive breakout above first resistance and has earned upgrades from brokerages. 

Kellton Tech Solutions:  

The company has shifted most of its focus on AI offering generative as well as conversational AI-based solutions. It has also launched Kverse Customer Experience Center and Innovation Lab in their Gurgaon with a focus on AI. 

The company has low debt and has seen increasing FPI investment. The stock recently witnessed highest recovery from a 52-week low. A low PE ration makes the stock attractive at current valuation, but increased promoter share pledge can be a dampener. 

Saksoft:

Another company that has moved its focus to AI, Saksoft offers AI-based end-to-end services encompass AI consulting, data mining, ML development, computer vision, and NLP-powered aspect-based sentiment analysis. 

On technical charts, the stock is under pressure as its moving average convergence/divergence indicator was below signal line. It, however, has also seen highest recovery from a 52-week low. The company has zero promoter pledge and no debt on its books.   

Subex:

The company has focused on AI solutions for telecom companies, apart from other sectors.  It leverages AI to help telcos forecast network growth -- traffic, users, and utilization. It also offers machine learning and deep learning algorithms like LSTM, generative adversarial networks, capsule network, elastic net, etc. to detect and prevent fraud in network.

The stock as low PE ration offering a good check in time. The company has no debt and has seen rising interest from FPIs. A fall in ROE and RoCE, over the last 2 years, however, are red flags, apart from pressure on financials. 

Happiest Minds Technologies:

The company is offering solutions that combines augmented intelligence with natural language processing, image analytics, video analytics, and emerging technologies like AR and VR.

The stock has been under pressure due to increased promoter pledge and a fall in MF holding. The stock is below short-, medium- and long-term averages. However, strong financials are one of positives. 

Overview of the AI Industry

The Indian AI industry mostly comprises of start-ups and incumbent technology companies that have started delving into the field. The government is also doing its bit to leverage the technology. The Ministry of Electronics and IT has sought an outlay of Rs 10,000 crore for India AI plan, including setting up servers on PPP mode.

According to a 2023 survey by PwC around 54% of companies have implemented AI for business. This gathered further momentum post COVID as companies started using AI tools to smoothen their workflow. 

A joint study conducted by Microsoft and the Internet and Mobile Association of India (IAMAI) showed India produces 16% of the world’s AI talent pool and Indian AI market is expected to witness a growth of 20% over the next five years.

Most of these companies are already technology leaders in India and abroad and have now started using AI for innovative solutions for their customers. While few of them are pure play AI companies, most joint hands with others or opened own verticals for AI-based solutions.

Factors to Consider Before Investing in Best AI Stocks in India

AI stocks offer promising opportunity to investors due to the massive size the market is expected to command in the future. But like any other investment, a person should consider various factors before putting in the money. Here are some of those factors:

Financials: Check the fundamentals of the AI company that you plan to invest in carefully. The company’s balance sheet and cash flow statement need careful analysis as AI is costly. Companies will need deep pockets to invest in AI research. 

Client diversity: A company must have clients that are willing to spend on AI-based solutions. This would help the company spend on building AI workforce. 

Technical: If the valuation of an AI company is already very high, then one should be careful about investing in it. One should also look at other factors such as moving averages, support and resistance for each stock before investment decision. 

Partnerships: A partner that has already aced AI would always be helpful for any Indian company that wants to dabble in the sector. Even collaborations with research institutes and universities will be helpful. 

M&A capabilities: Many Indian listed companies are eyeing smaller AI startups in India and abroad for acquisition. A company with good amount of dry powder or funds to buy these startups will have an upper hand in the market. 
Segments of the AI Stocks

AI in itself is maze of many segments based on the focus or application. These segments represent different areas in which companies specialize in providing AI solutions and services. Here are some key segments of AI stocks:

Machine Learning or ML: Companies in this segment focus on solutions that help a machine learn on its own through deep learning algorithms. Such companies provide AI solutions for data analysis, predictive analytics, natural language processing, image recognition, and many other developing fields.

Natural Language Processing or NLP: This is one of the fastest growing us of AI. NLP companies specialise in language-related AI applications such as chatbots, voice assistants, and language translation. Such companies improve human-computer interactions through voice-to-text understanding.

AI Hardware: AI needs very high speed equipment. This segment includes companies that make AI-such components including Graphics Processing Units, Tensor Processing Units, and AI-enhanced chips. 

AI Platforms: Such companies offer AI software and platforms that enable businesses to build and deploy AI applications of their own.

Robotics: This segment that involves developing and deploying robots incorporating AI technologies. Such robots can be used in manufacturing, healthcare, and other industries to improve efficiency.

Internet of Things or IoT: This segment of the AI industry involves connected devices that can collect and exchange data. AI is used to analyze this data and provide insights that can improve products and services.

Also read: Best EV Stocks in India 2024

Why invest in AI stocks?

AI stocks offers the opportunity to capitalize on the transformative power of a technology that is set to reshape industries and drive innovation across various sectors. The global market for AI is projected at US $2.6 trillion by 2032 by Precedence Research.

Conclusion

AI stocks represent companies that are leading the development of cutting-edge AI solutions, from machine learning to robotics to healthcare diagnostics and every other field. AI is set to revolutionise business processes and decision-making  leading to changes that are as deep as the advent of computer or Internet itself. It is important for investors to key in on the drivers of this change and invest early.