AI is a cool tech that’s becoming a big deal in lots of industries. It can change how businesses work, making them better and more efficient. This opens up some great chances for AI companies in India to grow. The stock market in India is also showing this, with investors getting interested in AI stocks. In this blog, we will explore the benefits, risks, and Best Artificial Intelligence (AI) Sstocks in India 2024.
What are AI Stocks in India?
Before diving into which AI companies are worth investing in, let’s take a moment to grasp what artificial intelligence means in the Indian context. Artificial Intelligence is all about making machines, especially computers, smart like humans. It includes things like expert systems, understanding language, recognizing speech, and even making sense of what’s in front of a camera—basically, AI can do a lot of cool stuff. So, when we talk about AI stocks, we’re talking about investing in companies that are really into developing, applying, and pushing forward AI technologies.
The Indian AI Sector: An Overview
AI is becoming a big deal for the world economy and is expected to contribute around $15.7 trillion by 2030. That’s even more than the combined GDP of India and China! India, being the third-largest source of talent for AI globally, is in a great position for a big AI revolution. Investments in India’s AI capabilities are growing super fast, at a rate of 30.8% per year, and are expected to hit $881 million in 2023. The semiconductor industry is becoming the backbone of India’s AI market, projected to be worth $7.8 billion by 2025. It’s predicted that by 2025, 60% of AI’s impact on India’s GDP will come from sectors like Industrials & Automotive, Healthcare, Retail, and CPG. And keep an eye on BFSI (Banking, Financial Services, and Insurance) and Agri-tech—they’re becoming important areas for applying AI too.
AI Industry Outlook
The AI industry in India is experiencing growth with a market size reaching $119.78 billion in 2022 and an estimated value of $1,597.1 billion by 2030. Businesses across sectors, including healthcare, manufacturing, finance and retail are increasingly embracing AI technology.Â
With their groundbreaking advancements in AI such as ChatGPT, the artificial intelligence chatbot developed by OpenAI, recorded 100 million users only two months after its launch. This rate suggests that the future of artificial intelligence in India potentially looks promising.
| Company Name | Market Cap. | Share Price |
|---|---|---|
| Bosch Ltd | 65862 | 22270 |
| Tata Elxsi Ltd | 53780 | 8625 |
| Subex Ltd | 1909 | 34 |
| Saksoft Ltd | 3370 | 320 |
| Persistent Systems Ltd | 55568 | 7250 |
| Affle (India) Ltd | 18468 | 1310 |
| Kellton tech Solutions Ltd | 1036 | 105 |
| Happiest Minds Technologies Ltd | 13767 | 905 |
Please note that the above list is for educational purposes only, and is not recommendatory. Please do your own research or consult your financial advisor before investing.
Note:Â The data on this AI share list is from 3rd January, 2024.
Best Artificial Intelligence (AI) Stocks in India 2024
Here’s an overview of the 8 Best AI companies in India:
1. Persistent Systems Ltd
Persistent Systems Ltd is an Indian multinational company that provides software product development services, integration, and support services. It offers services in various domains such as healthcare, financial services, life sciences, and telecommunications. The company’s services include digital transformation, cloud computing, cybersecurity, and enterprise mobility. This stock is 2.73x as volatile as Nifty, with a market cap of ₹37,894 cr, the stock is ranked 159. It is also considered one of the top artificial intelligence stocks in NSE for 2023 investments.Â
2. Tata Elxsi Ltd
Tata Elxsi is an Indian design and technology company that provides engineering services and solutions across various industries such as automotive, healthcare, broadcast, and communication. They specialize in product engineering, design and visualization, and system integration. The stock is 2.23x as volatile as Nifty, with a market cap of ₹45,923 cr, it is ranked 141. It is also one of the top AI stocks in India for 2023 Investments.
3. Bosch Ltd
Bosch Ltd is an Indian subsidiary of the German multinational engineering and technology company, Robert Bosch GmbH. They provide technology and services in areas such as automotive, industrial technology, and consumer goods. This stock is 1.62x as volatile as Nifty, with a market cap of ₹54,654 cr, the stock is ranked 114, and is also one of the best AI stocks in India.Â
4. Affle (India) Ltd
Affle (India) generated an impressive operating revenue of Rs. 1,569.77 Cr. in the last 12 months. Notably, the company achieved a remarkable annual revenue growth of 29%, a commendable pre-tax margin of 20%, and a solid ROE of 16%. Furthermore, with a reasonable debt-to-equity ratio of 4%, Affle maintains a healthy balance sheet, making it one of the best AI stocks in India for long term investments.
5. Happiest Minds Technologies Ltd
Happiest Minds Technologies raked in a robust operating revenue of Rs. 1,542.35 Cr. in the past year. Achieving an impressive annual revenue growth of 28%, a commendable pre-tax margin of 22%, and an exceptional ROE of 27%, the company demonstrates strong financial performance. With a reasonable debt-to-equity ratio of 13%, the company maintains a healthy balance sheet, making it potentially one of the AI stocks to buy in India in 2023.Â
6. Subex Ltd
Subex generated Rs. 265.03 Cr. in operating revenue over the last 12 months. However, there is a concerning annual revenue decline of -17%, a pre-tax margin of -14%, and a poor ROE of -9%, all requiring improvement. On a positive note, the company is debt-free with a robust balance sheet, positioning it well for stable earnings growth through various business cycles. It is also one of the best artificial intelligence penny stocks in India.Â
7. Saksoft Ltd
Saksoft’s impressive financial performance includes an operating revenue of Rs. 727.62 Cr. over the last 12 months, showcasing a remarkable annual growth of 37%. Noteworthy indicators include a robust pre-tax margin of 16% and an exceptional ROE of 20%. With a debt-free status and a strong balance sheet, the company consistently achieves stable earnings growth throughout various business cycles. It is also one of the top artificial intelligence listed companies in India.Â
8. Kellton Tech Solutions Ltd
Kellton Tech Solutions generated Rs. 963.19 Cr. in operating revenue over the last 12 months. While a 9% annual revenue growth is positive, there is room for improvement in the -12% pre-tax margin and the -33% return on equity (ROE). The company maintains a reasonable 11% debt-to-equity ratio, indicating a healthy balance sheet.
Factors to Consider Before Investing in AI Stocks in India
Investing in AI stocks in India has the potential for significant returns, but it’s crucial to approach it with careful consideration. Here are five key factors to keep in mind when considering AI investments in 2023:
- Financial Strength: Take a close look at the financial health of potential AI investments. Analyze balance sheets, cash flow, and profitability records. Prefer AI companies listed on NSE with a strong financial position, as it indicates a solid foundation for sustained growth.
- Competitive Positioning: Given the fierce competition in India’s AI industry, thoroughly examine a company’s competitive standing. Evaluate factors like technology, market share, intellectual property, and customer base. A strong competitive advantage enhances a company’s growth and long-term prospects.
- Management Prowess: The track record of the leadership team is crucial. Assess their experience and understanding of the industry. A strategic and knowledgeable leadership is instrumental in ensuring the company’s, and consequently, the AI-based stocks in India’s long-term success.
- Regulatory Awareness: Stay informed about the evolving regulatory landscape for AI technologies in India. Look for AI companies listed on NSE that comply with regulations and understand potential impacts on their operations due to regulatory changes.
- Market Dynamics: Evaluate the market potential of AI company stocks in India. Analyze revenue, market share, and profitability growth potential. Companies well-positioned to meet the increasing demand for AI technologies in India and globally are likely to offer superior returns.
Advantages of Investing in Artificial Intelligence (AI) Stocks in India
Let’s explore some of the benefits of investing in AI stocks in India.
- Growth Potential: The AI industry is booming and is expected to hit a market size of USD 267 billion by 2027. As AI keeps changing industries like healthcare, finance, and retail, companies leading in AI technology have the chance for significant growth.
- Higher Returns: Putting your money into AI stocks in India can be quite rewarding, offering the potential for substantial growth. Even though the AI industry is still developing, the demand for its products and services is rising, which can drive up stock prices.
- Diversification: Investing in AI stocks in India brings the advantage of diversification. AI tech is used across various industries, so when you invest in AI stocks, you’re getting exposure to multiple sectors. This diversification can help lower the risk in your investment portfolio and bring more stability.
Risks of Investing in AI Stocks
Let’s check out the challenges to keep in mind when thinking about investing in AI stocks in India:
- Volatility: Just like with any investment, there are risks involved when it comes to AI stocks. One significant risk is the ups and downs of the stock market. The prices of AI stocks can be pretty shaky due to market fluctuations.
- Technological Changes: There are other risks too, like changes in regulations, competition, and the limitations of technology. Changes in rules could have an impact on the AI industry, and tough competition might cut into the profits of AI companies’ stocks. Additionally, the limitations of current technology could slow down the growth of the AI sector.
- Intense Competition: The AI industry is super competitive. Big companies with lots of resources can jump into the market quickly and shake things up, causing potential losses for investors. So, it’s crucial for investors to do thorough research before putting money into AI penny stocks in India.
Conclusion
Investing in AI stocks holds the promise of growth, but it’s not without its risks. To navigate this terrain wisely, investors can diversify their portfolio, delve into thorough research, and stay informed about industry developments. This informed approach can guide decision-making when considering AI investments. Given the rising importance of AI in diverse sectors, there’s potential for a bright future with AI companies listed on the NSE in India. As always, please do your own research and/or consult a financial advisor before investing.
Disclaimer: This blog is for educational purposes only and is not a buy/sell recommendation. The content should not substitute professional financial advice. Readers are urged to conduct thorough research or consult a financial advisor before making any investment decisions.
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