The keyword ‘Chat GPT’ is being talked about in every other post on your LinkedIn timeline, and with good reason. Artificial Intelligence (AI) has dominated search results for the last few months and gained prominence. Just like how the internet was a new concept just a few decades ago, AI is the face of the future and will be the next thing to change the world.
When you compare the boom of the Indian IT sector in the 90s to the current state of AI, it’s obvious that AI is the future to invest in. Indian companies and investors are increasing their shares in analytics and AI, and this is being reflected in our stock market.
Pick any company listed on the stock exchange and there’s a high chance they’re diving into AI. But that’s not what we’re doing today. In this list, we’re looking at the top Artificial Intelligence players, companies that are choosing to focus at least one main offering in AI.
Here are the top AI-based stocks in India to watch out for in 2023:
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As a company, Affle looks at building customer CX and focusing on insight-led solutions, specifically in the mobile advertising sector. They’ve run mobile ads for some of the biggest companies in India such as Flipkart, Bookmyshow, Amazon and more.
With the help of AI-based data, algorithms and deep learning, they’re seeking to build the bridge between marketers and consumers to increase engagement.
To note for potential investors: Affle’s share price has grown 5.5 times since its IPO was listed in August 2019.
Born out of Pune in 1993, ‘data and analytics’ is one of the key offerings by the company. They service multinational companies across various sectors such as financial, healthcare, media and software to build AI-based solutions, improve automation, personalization and so much more. With the ethics of artificial intelligence being called into question, the company is looking to incorporate the practice of building a ‘Responsible AI’ system.
To note for potential investors: Their annual revenue growth in 2022 (36.29%) was more than their CAGR for the last 3 years (19.03%)
With the help of cloud-enabled applications, automation and omnichannel solutions, Saksoft delivers data-driven insights to enhance customer experience. One of their core offerings is ‘augmented analytics’ which focuses on hyper-personalising the customer experience with deep learning, data and analytics. They also help their clients improve the data collection to the analysis process, which equals faster business action.
To note for potential investors: Virtually debt-free, Saksoft has displayed increasing revenue over the last four quarters, and their dividends are well covered by cash earnings.
OFFS provides financial solutions products, primarily via banking software that aids customer experience. Their services aim to improve personalization, decrease data breaches, strengthen financial and risk management processes, and cloud-based infrastructure for banks and others. They have some of the biggest companies to count amongst their clientele, such as Zoom, FedEx, Qatar Airways, Puma and Canon.
To note for potential investors: Its P/E ratio of 15.0x is far below industry standards and the company has had poor revenue growth in the last decade. However, it is expected to change moving forward given its products and the future of AI.
One of the forerunners of digital technology in India, Zensar Technologies made headlines with its big shift to become AI-focused back in 2019. Its R&D facilities solely focused on AI and even filed for 100 patents between 2017 and 2019. It’s changing the way companies in the manufacturing, BFSI, and retail industries approach challenges with AI-based solutions, transforming supply chain management.
To note for potential investors: The company is trading at a good value when compared to others in the industry. It also has a good payout ratio (30%) with high and reliable dividend payouts.
Given its niche market, AI stocks come with their fair share of risks. However, we don’t buy stocks based on its current status but rather, on their future implications. AI will change the future, and this is the best time to be part of this change.