Artificial intelligence (AI) continues to be a powerful force in the stock market, reshaping how businesses operate and how investors assess long-term growth drivers.
AI stocks have been in the spotlight lately after Anthropic unveiled a major upgrade to its enterprise AI stack, introducing Claude Cowork and Claude Code as end-to-end workflow automation tools rather than simple chatbots.
The announcement raised concerns over potential disruption to traditional IT services and enterprise software models, triggering sharp selling in IT and AI-linked stocks globally.
Following the update, AI stocks witnessed heightened volatility, with investors reassessing the impact of rapid AI-led automation on revenue visibility and business models, particularly for IT services companies.
Despite the near-term turbulence, India continues to emerge as a major hub for data engineering and AI talent. Companies across sectors, including finance, healthcare, manufacturing, retail, and logistics, are steadily adopting AI-driven solutions to enhance efficiency and scale operations.
Against this backdrop, here’s a look at four Indian stocks operating in the AI space.
Please note, these are not pure-play AI stocks.
#1 Persistent Systems
First on the list is Persistent Systems.
Persistent Systems has steadily evolved its business model over more than three decades, with an increasing focus on cloud, data, and artificial intelligence.
The company’s current strategy is centred on an AI-led, platform-driven approach aimed at enabling enterprise-wide transformation at scale.
Over recent quarters, Persistent has operationalised this strategy across both technology and business use cases, positioning AI as a core layer.
The company’s AI framework spans engineering and business hyper-productivity, supported by enterprise data readiness, managed AI services, and responsible AI practices.
The company is also applying Agentic AI within its own operations, as a ‘customer zero’ to improve productivity and speed adoption at scale, an approach further validated by our recognition as a Microsoft Frontier Firm.
Over the past five years, the company has delivered solid financial performance.
Persistent Systems Financial Snapshot (FY21-25)
| Year | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue (Rs in m) | 41,879 | 57,107 | 83,506 | 98,216 | 119,387 |
| Revenue Growth (%) | 17.4 | 36.4 | 46.2 | 17.6 | 21.6 |
| Net Profit (Rs in m) | 4,507 | 6,904 | 9,211 | 10,935 | 14,002 |
| Net profit margin (%) | 10.8 | 12.1 | 11 | 11.1 | 11.7 |
| Return on equity (%) | 16.4 | 21.2 | 24.7 | 23.2 | 23.5 |
| Return on capital employed (%) | 22.3 | 26.5 | 32.7 | 31.6 | 31.7 |
Source: Equitymaster
Its revenue has grown at a CAGR of 27.3%, while profit has expanded even faster at a CAGR of 32.7%.
Its five-year average ROE and ROCE stand at 21.8% and 29% respectively, and the company continues to operate with a debt-free balance sheet.
Going forward, the company plans to deepen its adoption of emerging AI-driven technologies.
#2 Cyient
Next on the list is Cyient.
Cyient is a global engineering and technology solutions company that collaborates with customers to design digital enterprises, build intelligent products and platforms, and solve sustainability challenges.
As part of its strategic push into next-generation technologies, Cyient has set up Cyient Semiconductor Pvt Ltd (CSPL), a newly formed entity focused on advanced semiconductor solutions and AI-led innovation.
During the December 2025 quarter, Cyient Semiconductor marked a key milestone with the launch of India’s first indigenous silicon platform for smart utilities.
The flagship smart meter chip, ARKA GKT-1, was co-developed with Azimuth AI and launched by Union Minister Ashwini Vaishnaw, underscoring Cyient’s growing capabilities in custom ASIC design and execution strength in semiconductor engineering.
Alongside technology development, Cyient is also focused on building India’s AI-ready workforce.
The company is accelerating inclusive AI skilling through multiple initiatives, including the launch of AI and Future Skills Centres of Excellence in the North-East, aimed at empowering youth and supporting the national vision of Viksit Bharat 2047.
Cyient Financial Snapshot (FY21-25)
| Year | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue (Rs in m) | 41,324 | 45,344 | 60,159 | 71,472 | 73,604 |
| Revenue Growth (%) | -6.7 | 9.7 | 32.7 | 18.8 | 3 |
| Net Profit (Rs in m) | 3,638 | 5,223 | 5,144 | 7,028 | 6,483 |
| Net profit margin (%) | 8.8 | 11.5 | 8.6 | 9.8 | 8.8 |
| Return on equity (%) | 12.4 | 16.9 | 15.1 | 16.7 | 12.4 |
| Return on capital employed (%) | 17.2 | 23.8 | 20.0 | 23.1 | 18.1 |
Source: Equitymaster
Over the past five years, its revenue has grown at a CAGR of 10.7%, while profit has expanded even faster at a CAGR of 13.7%.
Its five-year average ROE and ROCE stand at 14.7% and 20.4% respectively, and the company continues to operate with a debt-free balance sheet.
Going forward, Cyient continues to invest in a domain-led and AI-enabled portfolio, with a focus on delivering intelligent engineering solutions at scale for its global customers.
#3 Tata Elxsi
Next on the list is Tata Elxsi.
As a leading Engineering Research & Design (ER&D) services provider, the company operates across two core segments—Software Development & Services (SDS) and Systems Integration & Support (SIS)—serving a wide range of industries.
Tata Elxsi has built a strong AI-driven ecosystem anchored by platforms such as TEDAX, its data intelligence and analytics platform.
TEDAX enables advanced use cases including predictive maintenance in aerospace systems, where large volumes of operational data are analysed to identify potential failures before they occur, improving reliability and operational efficiency.
In the healthcare domain, Tata Elxsi is leveraging multimodal AI and neuromorphic AI to enhance early disease detection, medical imaging, and pathology analysis. The company’s expertise in AI-powered medical devices and robotics is supporting innovation in diagnostic tools and robotic-assisted surgeries, improving precision and patient safety through strategic collaborations.
During the December 2025 quarter, Tata Elxsi was selected to deliver regulatory workflow transformation for a global MedTech leader.
This multi-million, multi-year deal is based on Tata Elxsi’s RegAI framework, which integrates AI, generative AI, and automation to streamline regulatory workflows and compliance. The solution is expected to deliver up to 30% improvement in cycle times, along with enhanced traceability and quality.
Over the past five years, the company has delivered solid financial performance.
Tata Elxsi Financial Snapshot (FY21-25)
| Year | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue (Rs in m) | 18,262 | 24,708 | 31,447 | 35,521 | 37,290 |
| Revenue Growth (%) | 13.4 | 35.3 | 27.3 | 13 | 5 |
| Net Profit (Rs in m) | 3,681 | 5,497 | 7,552 | 7,922 | 7,849 |
| Net profit margin (%) | 20.2 | 22.2 | 24 | 22.3 | 21 |
| Return on equity (%) | 27.2 | 34.3 | 36.2 | 31.8 | 27.6 |
| Return on capital employed (%) | 38.4 | 47.2 | 45.8 | 43 | 36.9 |
Source: Equitymaster
Its revenue has grown at a CAGR of 18.3%, while profit has expanded even faster at a CAGR of 25.1%.
Its five-year average ROE and ROCE stand at 31.4% and 42.2%, respectively, and the company continues to operate with a debt-free balance sheet.
Going forward, Tata Elxsi continues to invest proactively in applying AI and GenAI across innovation and product engineering workflows, tailored to specific verticals and domains.
This strategy is increasingly reflected in its deal wins and the differentiated value proposition it offers to customers across industries.
Conclusion
India’s artificial intelligence landscape is expanding at an exceptional pace. The country’s $264 billion (bn) information technology sector is projected to cross $400 bn by 2030, driven by the rising adoption of AI across global outsourcing, according to Bessemer Venture Partners.
As AI becomes an integral part of business strategy, the report indicates a growing shift toward outsourcing contracts centred on data-driven decision-making, cybersecurity, and automation support.
However, the transition is not without challenges. Rising competition, high upfront investment in AI infrastructure, and margin pressure due to rapid technological change could weigh on near-term profitability for some players.
Investors should evaluate the company’s fundamentals, corporate governance, and valuations of the stock as key factors when conducting due diligence before making investment decisions.
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