Best AI Stocks in December 2024:Persistent Systems, KPIT, Tanla and More – 5yr CAGR Basis

The Artificial Intelligence (AI) market is on track for massive growth, with its value expected to reach $184 billion by 2024. From 2024 to 2030, it is projected to grow at an impressive annual rate of 28.46%, potentially hitting $826.70 billion by 2030. Globally, the United States will dominate the AI market, estimated at $50.16 billion in 2024. In this article, we’ll explore some of the best artificial intelligence stocks in India for December 2024 based on their 5-year Compound Annual Growth Rate (CAGR).

Overview of Artificial Intelligence Industry

India’s AI industry is growing rapidly, driven by a mix of startups and established tech companies, along with strong government backing through a proposed ₹10,000 crore AI plan. A PwC survey revealed that 54% of companies adopted AI to improve operations after the COVID-19 pandemic. India also contributes 16% of the world’s AI talent and is expected to see its AI market grow by 20% over the next 5 years, according to a Microsoft-IAMAI study. This growth is being powered by tech leaders and AI-focused companies developing and collaborating on innovative AI solutions.

Best Artificial Intelligence Stocks in December 2024 – 5yr CAGR Basis

Note: The best artificial intelligence sector stocks in India listed here are selected from the Nifty 500 universe and sorted as per the 5-yr CAGR as of December 03, 2024. 

Overview of Best Artificial Intelligence Stocks in India in December 2024

• Persistent Systems

Persistent Systems provides software engineering and strategy services to help businesses improve and modernise their operations. The company has created its own software and frameworks, which include built-in integrations and features that boost efficiency. It also works with partners such as Salesforce and AWS.

For the quarter ending September 2024, Persistent Systems reported a revenue of ₹2,847.41 crore, an increase from ₹2,691.40 crore in the previous quarter (June 2024). The company’s net profit for Q2 FY24 stood at ₹285.96 crore, up from ₹247.94 crore in Q1 FY24. 

Key metrics: 

• Earning per share (EPS): ₹62.73
• Return on equity (ROE): 17.85%

• KPIT Ltd

KPIT is a global tech company focused on creating software solutions to drive the future of mobility, making it smarter, cleaner, autonomous, and connected. With a team of over 10,000 passionate employees called Automobelievers, KPIT specialises in embedded software, AI, and digital solutions, helping clients accelerate the adoption of next-gen mobility technologies. The company has development centres in Europe, the USA, Japan, China, Thailand, and India.

For the quarter ended September 2024, the company reported a revenue of ₹684.72 crore, showing a significant increase from ₹568.44 crore in the June 2024 quarter. Net profit also surged to ₹162.22 crore, compared to ₹75.29 crore in the previous quarter. 

Key metrics: 

• EPS: ₹14.71
• ROE: 23.51%

• Tanla Platforms Ltd

Tanla Platforms Ltd, formerly called Tanla Solutions Ltd, is a cloud communications company that helps businesses connect with their customers and target audiences. Headquartered in Hyderabad, India, it is a global leader in providing A2P (application-to-person) messaging platforms.

For the quarter ended September 2024, the company recorded a revenue of ₹222.98 crore, slightly lower than ₹239.93 crore in the June 2024 quarter. Net profit, however, saw a significant increase, rising to ₹93.24 crore from ₹17.02 crore in the previous quarter.

Key metrics: 

• EPS: ₹14.54
• ROE: 32.66%

• Birlasoft 

Birlasoft specialises in computer programming, IT consulting, and related services. It provides software development and consulting solutions to industries such as banking, financial services, insurance, life sciences, energy, utilities, and manufacturing. Based in Pune, the company is part of The CK Birla Group and has a team of over 10,000 professionals.

For the quarter ended September 2024, the company reported a revenue of ₹643.69 crore, down from ₹721.38 crore in the June 2024 quarter. Net profit also declined, standing at ₹52.02 crore compared to ₹108.37 crore in the previous quarter. 

Key metrics: 

• EPS: ₹11.41
• ROE: 20.37%

• Mastek 

Founded in 1982, Mastek is a company that provides specialised enterprise technology solutions. With nearly four decades of experience in the IT industry, Mastek has grown from an IT solutions provider to a trusted partner for digital transformation.

For the quarter ending September 2024, the company reported a revenue of ₹126.51 crore, an increase from ₹114.54 crore in the June 2024 quarter. Net profit saw a significant rise, reaching ₹64.01 crore compared to ₹14.37 crore in the previous quarter. 

Key metrics: 

• EPS: ₹42.80
• ROE: 15.00%

Things to Keep in Mind When Investing in AI Sector Stocks in India

• Financial Stability—Before investing, Check the financial health of AI companies. Look at their balance sheets, cash flow, debt-to-equity ratio, and revenue. Choose companies with strong finances, as they are more likely to grow successfully.
• Market Competition– Understand how AI companies compete in the market. Consider their technology, market share, and unique innovations. Companies with strong competitive skills are more likely to grow and sustain their position.
• Regulations– Stay informed about government rules on AI usage in India. Ensure the companies comply with these regulations, as rule changes can affect how they operate and perform in the market.

Conclusion

Investing in AI stocks offers growth potential but also comes with risks. Diversify your portfolio, do thorough research, and stay updated on industry trends. Always conduct your own analysis or seek advice from a financial expert before making investment decisions.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.