Best Artificial Intelligence (AI) Stocks in September 2024 Based on ROE

India is one of those countries where Artificial Intelligence (AI) is rapidly transforming across the world. The AI market in India is forecasted to reach $8 billion by 2025, reflecting at a CAGR of more than 40% from 2020 to 2025. On the back of initiatives like the National AI Strategy and the National AI Portal launched by the Government of India, AI adoption is increasing across various sectors in India.

With the exponential growth of data, there is a heightened focus on AI-powered data analytics. Companies are using AI-driven analytics to derive actionable insights, optimise operations, and drive innovation, supported by initiatives like the AI for All program launched by the National Association of Software and Service Companies (NASSCOM).

Investing in artificial intelligence (AI) stocks can be lucrative but also challenging. AI is a transformative technology that can potentially disrupt various industries, and many investors are interested in capitalising on its growth. In this blog, we will look at the best Artificial Intelligence stocks in India in September 2024 based on ROE.

Best Artificial Intelligence Stocks Based on ROE:

Note: The stocks have been selected based on ROE as of August 28, 2024.

Overview of 5 Best Artificial Intelligence Stocks

1. Tata Elxsi Ltd: Tata Elxsi is one of the world’s leading providers of design and technology services across industries, including Automotive, Media, Communications, and Healthcare. It provides integrated services from research and strategy to electronics and mechanical design, software development, validation, and deployment. During Q1 FY25, Tata Elxsi collaborated with Red Hat, the world’s leading provider of open-source solutions, enabling telcos to target monetisation opportunities in the automotive industry.

Key Metrics:

• Return on Capital Employed (ROCE): 42.7%
• Debt to Equity (D/E): 0.09x

2. Oracle Financial Services Software Ltd: Incorporated in 1989, Oracle Financial Services Software Ltd. provides financial software, custom application development, consulting, IT infrastructure management, and outsourced business processing services to the financial services industry. During FY2024, the company recorded license wins of $137 million, which was the highest ever for the company, registering a 44% growth over FY2023.

Key Metrics:

• ROCE: 39.5%
• D/E: 0.01x

3. L&T Technology Services Ltd: Incorporated in 2012, L&T Technology Services Ltd offers engineering, research and development (ER&D) and digitalisation solutions to companies in areas such as Transportation, Industrial Products, Telecom and Hi-Tech, Medical Devices and plants. During Q1 FY25, the company won two USD 30 million deals, two USD 15 million deals and three deals with TCV of USD 10 million.

Key Metrics:

• ROCE: 33.3%
• D/E: 0.12x

4. Persistent Systems Ltd: Persistent Systems provides software engineering and strategy services to help companies implement and modernise their businesses. It has its software and frameworks with pre-built integration and acceleration. With the help of key wins during Q1 FY25, Persistent delivers engineering and support services to accelerate the virtual private cloud roadmap and provide managed services for one of the largest US-based technology companies.

Key Metrics:

• ROCE: 29.2%
• D/E: 0.09x

5. Zensar Technologies Ltd: Zensar Technologies is a leading digital solutions and technology services company. It is a part of the Mumbai-based RPG group and is headquartered in Pune, India. It operates in two segments: Application Management Service and Infrastructure management service. In Q1FY25, the company reported revenue of $154.4M, sequential QoQ growth of 4.2% in reported currency and 4.3% in constant currency. On a YoY basis, this translates to 3.4% growth in reported currency.

Key Metrics:

• ROCE: 25.2%
• D/E: 0.05x

Conclusion

Government of India’s initiatives, such as Digital India, Make in India, and Smart Cities Mission, drive AI adoption across sectors. Additionally, the recently launched National AI Portal and the National AI Strategy aim to foster AI research, development, and deployment across the country.

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.