Welcome to our blog video series, where we dive into the world of the stock market and curate informative articles sourced from the wealth of knowledge available on YouTube. In this blog, we will be discussing the Top 5 Best AI stocks to buy in 2023 India.
Artificial Intelligence (AI) is no longer a distant dream; it’s our present reality. From students to CEOs, AI tools have become an integral part of daily life for people across the globe. In 2023, several AI tools gained prominence, revolutionizing industries and sparking both excitement and concerns about job security.
Investors worldwide have recognized the potential of AI and poured millions and billions into this booming industry. American giant Nvidia’s stock, which benefited from the AI boom, skyrocketed at the start of 2023. However, it’s not just the US companies that are making waves; India has also emerged as a player in the AI space, and today we’ll discuss five Indian stocks that are at the forefront of the AI domain.
1. Tata Elxsi
Tata Elxsi, an Engineering Research and Development company, has made significant strides in the AI domain. Their services cater to various sectors such as Automotive, Broadcast & Communications, and Healthcare. One of their remarkable AI offerings is the TataElxsi Driver Intelligence Service, which focuses on driver behavioral insights using AI and analytics. Major automobile Original Equipment Manufacturers (OEMs) have shown immense interest in this solution.
The company also excels in AI-based video analytics services for the broadcast and media industry. Despite the dominance of Western markets in their revenue, Tata Elxsi has achieved consistent growth over the years, compounding its revenue at 17% and profits at 32% CAGR in the last decade. As the automobile sector witnesses an EV and self-driving car revolution, Tata Elxsi’s position becomes even more promising.
2. Persistent Systems
Persistent Systems, a global software solution and tech innovation company is at the forefront of the AI revolution. It partners with major IT giants like AWS, IBM, Salesforce, Microsoft, and Google to provide highly customizable and powerful AI solutions to its clients. Their conversational AI platform has revolutionized customer engagement through personalized communication and chatbots, leveraging Natural Language Processing and Machine Learning techniques.
The company has demonstrated remarkable growth, with a 3-year sales CAGR of over 33% and a profit CAGR of 41%. While geographic concentration poses a risk, Persistent Systems’ growing order book and strong relationships with top global companies have fueled its steady revenue and operational growth.
3. KPIT Technologies
KPIT Technologies is playing a crucial role in the advancement of autonomous driving solutions. From Advanced Driver Assistance Systems (ADAS) to Vehicle Engineering & Design, KPIT provides cutting-edge AI-based solutions to automobile OEMs. With development centers in multiple countries, including Europe, the USA, Japan, and India, KPIT has positioned itself as a technology-intensive company in the automotive sector.
Their AI-driven research and development efforts have resulted in steady revenue and operating profit growth. However, KPIT faces challenges related to geographic concentration and working capital, which need to be carefully monitored.
4. Zensar Technologies
Zensar Technologies, a part of RPG Enterprises Group, has made significant strides in the insurance sector with its AI-based services. Their FNOL (First Information Loss) and self-service app, integrated with AI functionalities, have streamlined risk assessment and seamless claim settlement services, reducing turnaround time and costs.
Zensar caters to multiple industries, including hi-tech and manufacturing, BFSI, and retail and consumer services. Despite its growing order book and strong customer relationships, geographic and industry concentration pose risks to its revenue.
5. Cyient Limited
Cyient Limited, a multinational technology company, offers specialized product and process engineering services in aerospace and defense, communications, transportation, and semiconductors. With its AI-based CyARC and CyFAST solutions, Cyient is simplifying regulatory operations and test processes, resulting in cost savings and increased efficiency for its customers.
Cyient has established strong relationships with industry leaders, reflected in its repeat orders and a healthy operational profile. However, revenue concentration in certain industries and regions remains a key monitorable aspect.
The AI revolution is undoubtedly transforming the global landscape, and India is playing a significant role in this transformative era. Companies like Tata Elxsi, Persistent Systems, KPIT Technologies, Zensar Technologies, and Cyient Limited are spearheading the AI domain with innovative solutions across various sectors.
While these stocks offer immense potential for investors, it’s essential to monitor the risks associated with each company’s geographic and industry concentration to make informed investment decisions.
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Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Sharedhan. We advise investors to check with certified experts before taking any investment decisions.