AI industry in India
India’s AI industry is growing and changing how businesses work. From banking apps to healthcare tools that help doctors detect diseases early, AI is becoming more common in everyday life.
Two main factors that are pushing the growth of AI in India are:
- Strong government support, and
- Active IT giants.
Under the Government of India’s initiative, the IndiaAI Mission, more than ₹10,000 crore was approved in 2024 for 5 years. It is used to fund local research and support young startups. Traditional IT companies are also investing heavily in AI. They are using AI to build smarter software for clients across the globe.
AI systems need powerful computers and large amounts of electricity. This creates demand for data centres, power equipment and cooling systems. Companies that supply this infrastructure may also benefit as AI use grows.
India’s AI market is expected to continue growing over the coming years. But some companies may win new projects, while others may struggle to keep up with the changing technology. So don’t expect all the stocks in this sector to benefit equally from the industry’s growth.
Overview of top 5 AI stocks
While no company in India is purely categorised as an AI business, here are 5 listed names in the Indian market with links to AI.
Disclaimer: The stocks listed above are selected based on market capitalisation. The information is provided for educational and informational purposes only and should not be considered investment advice.
Bosch
Bosch Limited is known for automotive parts and technology. Its work also includes electronic systems used in modern vehicles. Its AI technology is useful in driver assistance, factory automation and spotting equipment problems before they cause a breakdown. However, Bosch has several business lines beyond AI.
Persistent Systems
Persistent Systems Limited is a popular Indian IT giant that helps businesses build software. It has developed AI platforms such as SASVA and GenAI Hub. The company is working with clients that want to use AI in their day-to-day operations, not just test it.
Oracle Financial Services Software
Banks need software to manage accounts, payments, risks and suspicious transactions. Oracle Financial Services Software makes products for these needs. AI helps banks study data and automate some tasks. The company’s business also depends on banks upgrading their systems and spending on technology.
L&T Technology Services
Larsen & Toubro Technology Services (LTTS) provides engineering and research services to clients in industries such as automotive, manufacturing and sustainability. It also has AI-related platforms, including PLxAI and AiNexus. In FY26, the company reported 237 parent filings related to AI and generative AI, out of a total of 1,706 filings across its portfolio.
Affle 3i
Affle 3i Limited works in digital advertising. Its platform uses data and AI to help businesses reach potential customers and measure ad results. Revenue from operations grew 19.5% YoY to ₹2,909.30 crore in FY26.
How to pick the right AI stocks
If you are planning to buy AI stocks, don’t pick just because everyone is talking about it. Instead, look out for these things first:
- What the company actually does: Go through the company’s website or annual report. Find out whether it sells AI products, builds systems for clients or simply uses AI in its regular work.
- Who does the company serve: See who buys its products and services. A company that depends on just a few large clients could face trouble if one of them leaves.
- Who are its competitors: Other Indian and global companies may offer similar services. See what makes the company different.
- Is the stock overvalued or undervalued: A company may be doing well, but its stock may already be expensive. Compare its valuation with its earnings and growth. You can also compare its price-to-earnings ratio with the peers and industry average.
There are some factors you need to consider while picking AI stocks. And since you are investing in equity, you should also consider your risk appetite. Stock prices can react sharply to any type of news, positive or negative, and therefore, you should be comfortable with volatile price movements in the short term.
The bottom line
AI stocks can be a way to invest in a technology that is increasingly becoming an important part of more and more businesses. Putting all your money into one stock or sector can be risky. If you don’t want to depend on one company’s growth, you can look at diversified equity funds or thematic funds that hold technology-related stocks.
You can explore suitable mutual funds on the Million app. In a few simple steps, you can set up a SIP to regularly invest, without having to time the market. Check the portfolio before committing, as not every fund may invest in the companies you’re looking for. Ensure the scheme’s risk level matches your risk comfort.
