3 AI Stocks Retail Investors May Be Watching In India

AI stocks sit at the center of one of the most closely watched themes in markets today. While rates, inflation and energy prices keep moving, investors are still looking at where real long term change in how people work and consume could come from. The Artificial Intelligence / AI Stocks screener focuses on companies tied directly to this shift, including chips, software, large language models, ChatGPT, cloud and broader transformation. In this article you will see three stocks from the screener that help show different ways to get exposure to the AI trend.

Netweb Technologies India (NSEI:NETWEB)

Overview: Netweb Technologies India designs and manufactures high end computing solutions in India, supplying AI systems, supercomputers, private and hybrid cloud infrastructure, high performance storage and data centre servers under its Tyrone brand to sectors ranging from IT services and banking to government, defense and research institutions.

Operations: Netweb Technologies India currently generates its revenue primarily from Manufacturing and Sale of Computer Servers, which contributed ₹27,020.37 million.

Market Cap: ₹248.49 billion

Netweb Technologies India sits in the middle of the AI infrastructure build out, with AI servers, high performance computing and unified data platforms such as the new Tyrone ParallelStor Velox, all aimed at heavy duty workloads in government, BFSI and enterprise. Reported earnings growth has been rapid and ROE is 36%, backed by in house R&D and appliance based solutions that can support pricing power. At the same time, a very rich P/E, heavy dependence on large government orders and higher share price volatility point to a higher risk profile. A key consideration for investors is how its expanding order book, new leadership hires and potential fund raising may influence the company’s next phase of development as an AI focused manufacturer.

Netweb Technologies India sits at the crossroads of rapid earnings growth, a 36% ROE and a rich P/E that hints at high expectations. Yet the real story sits inside the 2 key rewards and 1 important warning sign

KPIT Technologies (NSEI:KPITTECH)

Overview: KPIT Technologies builds the embedded software, artificial intelligence and digital platforms that run inside modern vehicles, from autonomous driving and advanced driver assistance to battery management, charging systems and vehicle operating systems for global car makers.

Operations: KPIT Technologies currently generates its revenue across the Americas, UK & Europe and the Rest of the World, with reported segment revenues of ₹17,938.63 million, ₹33,092 million and ₹32,212.98 million respectively.

Market Cap: ₹173.88 billion

Investors watching AI in real world products may pay attention to KPIT Technologies because it sits where automotive software, safety standards and AI driven engineering meet. The stock has fallen sharply from its peak and recent earnings have come in below earlier expectations, with profit margins under pressure and revenue growth trailing the broader software sector. KPIT reports a long run of 21% EBITDA margins, low employee attrition around 7% and a growing solutions business that uses AI tools to improve productivity on fixed price contracts. Along with net cash, expanding programs across Europe and Asia and a push into automotive cybersecurity, this presents a company where the near term setback and the longer term potential do not tell the same story.

KPIT Technologies appears to be an auto software story where margins and recent earnings are only half the picture. The real puzzle sits inside the 2 key rewards and 2 important warning signs which hints at what could shift next.

Tata Elxsi (BSE:500408)

Overview: Tata Elxsi helps global clients build AI powered software and digital products, from in car systems and autonomous driving platforms to video streaming, telecom networks and healthcare tools, using its mix of product design, engineering and systems integration services.

Operations: Tata Elxsi currently generates most of its revenue from Software Development and Services at ₹37,846.13 million, with a smaller contribution of ₹1,018.22 million from System Integration and Support Services.

Market Cap: ₹228.78 billion

Tata Elxsi sits at the intersection of AI, automotive and healthcare, with multiyear deals in media and car software, AI driven platforms like Neuron and AnaTel, and fundamentals that include a 2.04% dividend yield, ROE around 21.5% and net profit margins of about 16.7%. Investors still need to weigh near term margin pressure from AI investment, slower revenue growth than the wider Indian market and project timing risks in the auto vertical, particularly in the context of geopolitical and client level changes. For more on how this mix of long dated contracts, expanding AI platforms and governance considerations may affect Tata Elxsi, see the 2 key rewards and 0 important warning sign

Tata Elxsi combines AI platforms, long term auto and media contracts, and a 2.04% dividend yield in a way many investors may be underestimating. To explore how this story could evolve next, review the analyst forecasts for Tata Elxsi

The three AI stocks in this article are only a starting point, with the full screener surfacing 24 more companies with equally compelling narratives across chips, software, LLMs, ChatGPT and cloud infrastructure through the Artificial Intelligence/ AI Stocks screener. Use Simply Wall St to identify and analyze the specific catalysts and narratives that matter to you, so you can focus on the highest conviction AI opportunities.

Take Control of Your Investment Journey

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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