The artificial intelligence (AI) industry in India is growing rapidly, with many companies using the technology in applications ranging from healthcare and finance to retail and manufacturing.

AI chip leader Nvidia reported revenue growth of over 100% in the June quarter, reaching a record $30 billion, with operating income up 175% year-over-year, underscoring the global surge in AI adoption, including in India.

India has a long history with AI, and its market has grown exponentially in recent years. AI systems have become more important because they can create economic value and solve social problems.

With a vast talent pool, growing digital infrastructure and government initiatives like Digital India, India offers significant opportunities for companies looking to leverage AI technologies.

AI is useful in many sectors, such as education, agriculture and healthcare. It can help with things like precision farming advice or remote medical diagnostics.

It also makes it easier for people to access government services. According to a report by BCG and Nasscom, the AI ​​market in India is growing rapidly and is expected to reach around $17 billion (billion) by 2027.

In this article, we take a look at the leading AI companies in India.

#1 Affle India

Founded in 1994, Affle is a global technology company with a proprietary consumer analytics platform that turns ads into recommendations.

This helps marketers effectively identify, engage, acquire and drive transactions with potential and current users.

The company offers two broad categories of services, i.e. consumer platform services and enterprise platform services.

In terms of consumer platform services, Affle helps its clients acquire new customers through targeted mobile advertising and generates revenue on a cost-per-consumer basis.

In the area of ​​enterprise platforms, the company provides comprehensive solutions for enterprises that aim to improve their interactions with mobile users, e.g. by creating applications, enabling offline commerce to online commerce for offline companies that aspire to e-commerce, etc.

Affle has an international presence across the world, including India, Southeast Asia, the Middle East, Africa, North America, Europe, Japan, South Korea, and Australia. The company derives 65% of its sales from exports and the remaining 35% from the domestic market.

Turning to the financials, Affle reported revenue growth of 27.8% in Q1 FY25 and operating profit growth of over 33.8%. EBITDA margins increased significantly from 21.6% in Q1 FY24 to 24.9% in Q1 FY25.

Looking to the future, the management is optimistic and expects a further acceleration of the growth dynamics thanks to a gradual increase in the operating profit margin.

This follows a noticeable shift in advertising from traditional to digital platforms, with increasing importance being placed on performance-based metrics.

The company’s share value has increased by 52% over the past year thanks to strong operating results.

#2 Oracle Financial Services Software

Oracle Financial Services Software Ltd is engaged in the provision of financial software, custom application development, consulting, IT infrastructure management, and business data outsourcing services to the financial services industry.

The company owns and operates brands such as Oracle, Java, and MySQL as registered trademarks. Flexcube is also one of the company’s offerings, which is a platform for retail, corporate, and investment banking. It serves areas such as risk management, treasury, consulting, etc.

Oracle has a diversified revenue base that is not heavily concentrated in any one geographic region. 23% of revenue comes from the US and Asia Pacific, 20% from the Middle East and Africa, 17% from Europe, 10% from India, and the remaining 7% from the Rest of the Americas.

However, the company derives about 51% of its revenue from just one customer, meaning any changes in order flow from that customer could have a material impact on Oracle’s financial results.

Oracle Corporation, the company’s parent company, recently announced a solid outlook for 2025, expecting double-digit revenue growth, exceeding analyst expectations.

In addition, Oracle Corp. unveiled a strategic partnership with OpenAI, the creator of ChatGPT. The collaboration aims to expand the company’s cloud infrastructure offerings, increasing its ability to serve customers.

Coming to the financials, the company reported a solid revenue growth of 19.1% in Q1 FY25 and EBITDA growth of 33.8%. EBITDA margins also improved to 51.4% in Q1 FY25 from 49.6% in Q1 FY24.

Oracle Financial Services Software shares are up 175% over the past year on strong financial results.

#3 Persistent Systems

Persistent Systems offers software engineering and strategy services to help companies implement and modernize their businesses.

The company has its own software and frameworks with predefined integration and acceleration. The company has partnerships with service providers such as Salesforce and Amazon web services.

Persistent has been named India’s fastest growing IT services brand since 2020, with a growth of 268% and ranked 9th among Indian IT services companies.

Persistent is present in over 21 countries around the world, including India, Australia, Canada, Germany and Japan.

Geographically, the company derives 80% of its sales from North America, 9% of its revenues from Europe, 10% from India and the remaining 1% from the rest of the world.

Persistent Systems boasts a diverse clientele of over 375 customers, serving 6 of the top 10 global technology companies, 5 of the top 10 banks in the US and India, and 7 of the top 10 healthcare providers in the world.

The company recently announced its intention to acquire 100% of the American software company Starfish Associates for $20.7 million. Known for its cutting-edge enterprise communications automation platform, Starfish serves some of the world’s largest enterprises, including many of the Fortune 500.

Turning to the financials, Persistent reported a 17.9% increase in consolidated revenue and EBITDA growth of 21.6% in the first quarter of fiscal year 2025. EBITDA margin improved slightly and stood at 17.8% compared to 17.1% in the previous year.

Persistent Systems shares are up 98% over the past year. The stock is up 4.6% over the past month.

#4 Zensar Technologies

Zensar Technologies is a leading digital solutions and technology services company. It is part of the Mumbai-based RPG Group and has headquarters in Pune, India.

The company operates in two segments: Application Management Service and Infrastructure management service. It focuses on vertical industries such as hi-tech and manufacturing, consumer services, and banking, financial services and insurance.

82% of the company’s revenue comes from digital services and applications, with the remaining 18% coming from digital foundation services.

Geographically, the company earns 67% of its revenue from the US, 21% from Europe and 12% from Africa. The largest contributor to revenue is the BFSI sector, which contributes 38%, followed by the high-tech and manufacturing sectors, which contribute 27% and 25%, respectively.

The company has over 148 active clients, of which the 5 largest generate 31% of revenues.

Zensar announced the acquisition of pharmaceutical and life sciences consulting firm BridgeView Lifesciences for a total transaction value of $25 million, which will allow the company to expand its healthcare offerings.

Coming to the financials, Zensar Tech reported a 5% growth in consolidated revenue and EBITDA declined by 14.7% in the first quarter of fiscal 2025. EBITDA margin stood at 18.5% as compared to 21.1% in the previous year.

Application

The area of ​​artificial intelligence (AI) is characterized by enormous potential resulting from the rapid technological progress and the increasingly widespread implementation of this technology in various industries.

As AI continues to revolutionize sectors such as healthcare, finance, and autonomous systems, investors have an opportunity to benefit from the transformative power of these innovations.

By keeping up with technological advances and focusing on leading AI companies, investors can position themselves to benefit from future advancements.

AI is the next big thing in the digital ecosystem. Investors can benefit from choosing the right companies and staying put for the long term so that wealth creation can happen.

However, when considering investing in AI stocks, it is important to be aware of the risks. Regulatory changes, competition, and technological limitations are all factors that pose challenges to the AI ​​industry.

Before taking a risk, be aware of the challenges this industry poses, as high competition can cause established companies with significant resources to quickly abandon existing players, potentially exposing investors to losses.

Happy investing!

Disclaimer: This article is for informational purposes only. It is not a stock recommendation and should not be treated as such.

This article is syndicated from Equitymaster.com