Best AI Stocks in January 2025: Persistent Systems, KPIT and More – Based on 5-Yr CAGR

As we enter January 2025, the Indian AI sector is poised for significant growth, driven by advancements in technology and the government’s commitment to fostering a digital economy. With Artificial Intelligence (AI) being hailed as a key enabler for India’s economic expansion, it is expected to play a pivotal role in driving investments, job creation, and innovation across industries.

India’s AI market is expanding at an impressive CAGR of 25-35%, with projections estimating it will reach around $17 billion by 2027, according to a recent report by BCG and Nasscom. In this thriving environment, AI-focused companies are emerging as strong contenders for growth, making AI stocks increasingly attractive to investors.

Let’s take a look at the best Artificial Intelligence stocks in January 2025, based on their 5-year CAGR.

Top AI Stocks in India in January 2025 – 5yr CAGR Basis

Note: The best AI stocks list here is as of December 26, 2024. The stocks are sorted based on the 5Y CAGR. 

Overview of the Best Artificial Intelligence Stocks

• Persistent Systems Ltd

Persistent Systems is a global leader in AI-driven digital transformation, providing customised AI solutions for enterprise growth. The company collaborates with top brands across industries to integrate AI for innovation and modernisation.

For the quarter ending September 30, 2024, Persistent Systems reported a net profit of ₹324.99 crore, a 23.4% increase compared to Q2 FY24. The revenue for Q2 FY25 was ₹2,897.15 crore, marking a 20.1% growth compared to Q2 FY24.

Key metrics:

• Earning per Share (EPS): ₹21.19
• Return on Capital Employed (ROCE): 28.81%

• KPIT Technologies Ltd

KPIT Technologies leverages artificial intelligence (AI) to drive innovation in autonomous driving and ADAS solutions. The company integrates AI techniques across various modules, including environmental perception, path planning, and trajectory estimation, to enhance vehicle safety and performance.

For the quarter ending September 30, 2024, KPIT Technologies saw strong growth in both revenue and profit. The company’s profit after tax was ₹203.7 crore, a 44.7% increase compared to Q2 FY24. Revenue for the quarter was ₹1,471 crore, reflecting a 20.1% growth in constant currency terms and a 19.3% increase in dollar revenue.

Key metrics:

EPS: ₹5.51

ROCE: 33.08%

• Tanla Platforms Ltd

Tanla is a leading SaaS company revolutionising digital interactions by empowering enterprises through innovative solutions. In the AI domain, Tanla leverages advanced AI/ML technologies to enhance data security, privacy, and user experiences.

For the quarter ending September 30, 2024, Tanla Platforms reported a revenue of ₹1,001 crore, showing a slight decrease of 0.8% compared to Q2 FY24. The company’s profit after tax for the quarter stood at ₹130 crore, with a PAT margin of 13%. Despite the small drop in revenue, Tanla continued to maintain strong profitability.

Key metrics:

EPS: ₹9.7

ROCE: 34.55%

• Birlasoft Ltd

Birlasoft is a global leader in digital transformation, leveraging Cloud, AI, and innovative technologies to deliver enterprise solutions. With a strong focus on industries like banking, healthcare, and manufacturing.

For the quarter ending September 30, 2024, Birlasoft reported a revenue of ₹1,368.2 crore, marking a 4.5% growth compared to ₹1,310.5 crore in Q2 FY24. The company also achieved a profit after tax of ₹127.5 crore, reflecting a solid performance in the quarter.

Key metrics:

EPS: ₹4.59

ROCE: 26.88%

• Tata Elxsi Ltd

Tata Elxsi leverages artificial intelligence (AI) to drive business transformation through advanced solutions like AI-based video analytics, driver monitoring systems, and conversational AI.

For the quarter ending September 30, 2024, it reported a net profit of ₹229.43 crore, reflecting a 14.7% year-on-year (YoY) growth compared to ₹200.89 crore in Q2 FY24. The company’s revenue from operations stood at ₹955.09 crore, against ₹881.88 crore in the same quarter last year.

Key metrics:

EPS: ₹36.84

ROCE: 39.03%

Conclusion

While the Indian AI sector offers promising growth prospects, investors should carefully assess their financial goals, risk tolerance, and investment horizon before diving into AI stocks. While these companies have demonstrated impressive growth in the past, the AI market is still evolving, and market volatility can impact stock performance. Consulting a financial advisor can help tailor investment strategies to individual needs and ensure a more informed approach to entering the AI space.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Investments in securities market are subject to market risks, read all the related documents carefully before investing.