Artificial intelligence (AI) is transforming industries such as healthcare, finance, retail, manufacturing, cybersecurity, and automobiles.
Companies developing AI software, cloud computing, semiconductors, automation, and data analytics will benefit from the digitalisation trends.
In India, companies focused on AI are expected to benefit from increasing demand for smart solutions, government-led digital initiatives, and enterprise automation.
AI stocks have become important to investors. They’re attracted to AI stocks because of the strong long-term growth potential and the ability of these firms to improve productivity and profitability.
And now even FIIs are now attracted to the Indian AI theme.
Here are 3 AI stocks where FIIs added to their holdings in the March 2026 quarter.
#1 Tech Mahindra
First on the list is the stock is Tech Mahindra.
Tech Mahindra is a leading Indian IT services and consulting company under the Mahindra Group. The company provides services in AI, cloud computing, cybersecurity, telecom, and digital transformation. It operates across 90+ countries and serves industries including banking, healthcare, manufacturing, and communications.
FII Holdings – Tech Mahindra
| Sept 2025 | 20.60% |
| Dec 2025 | 17.94% |
| March 2026 | 18.59% |
Source: Equitymaster
For Tech Mahindra, FII holdings show an interesting trend. Foreign investors sharply reduced their stake from 20.60% in September 2025 to 17.94% in December 2025. But the increase to 18.59% in March 2026 suggests FIIs have started returning selectively to the stock.
On the AI front, Tech Mahindra has been scaling-up to make its offerings increasingly AI-led. It has made investments to embed AI across services, to augment capabilities, and to bring in seasoned industry specialists to drive innovation and execution at scale.
In a recent earnings call, the management said the company is seeing increased engagements with large clients across data and AI-led initiatives, creating a clear pathway to scale enterprise-wide transformation programs as AI adoption accelerates.
FY26 was a good year for Tech Mahindra in terms of client additions. The company’s US$ 50 million plus clients increased by 4 year-on-year to 29, and US$ 20 m plus client base increased by 7 year-on-year to 66.
This growth reflected the company’s success in deepening client relationships and expanding the scope of services delivered across the portfolio, including AI, data, and consulting-led engagements.
The market positioning and investments over the last year has been centered around AI delivery and this is paying off in client engagement metrics.
Coming to the FY26 performance, revenues were US$ 6,385 m, up 1.9% and 0.6% on CC basis. Full-year operating profit for the year stood at US$ 797 m, up 31.4% YoY, and margin expanded from 9.7% to 12.6%, up 290 basis points.
#2 Tata Elxsi
Next on our list is the stock of Tata Elxsi.
Tata Elxsi is among the world’s leading providers of design and technology services across industries including Automotive, Broadcast, Communications, Healthcare, and Transportation.
It helps customers reimagine their products and services through design thinking and application of digital technologies such as IoT (Internet of Things), Cloud, Mobility, Virtual Reality, and Artificial Intelligence.
FII Holdings – Tata Elxsi
| Sept 2025 | 12.53% |
| Dec 2025 | 8.57% |
| March 2026 | 11.08% |
Source: Equitymaster
FII holdings in Tata Elxsi fell sharply between September and December 2025, indicating cautious sentiment amid valuation or growth concerns. However, the rebound in March 2026 suggests renewed confidence.
The company is making rapid strides in AI. In a recent earnings call in April 2026, the management stated that in FY26, the company significantly advanced its adoption of GenAI.
This was supported by partnerships with AI companies, launch of its own automotive SDLC platform DevStudio.ai earlier in this quarter, curated tool stacks and agent inventory, investments in infrastructure, sandbox environments with IP protection and data privacy, and rigorous upskilling.
With these coordinated efforts, Tata Elxsi is progressing steadily towards being an AI-native engineering organisation, strengthening differentiation and innovation.
The management is focused on scaling its differentiated design-led and AI-enabled offerings, strengthening operational leverage, and driving sustainable growth and healthy margins.
#3 LTM
LTM is one of India’s leading IT services and digital transformation companies. It was formerly known as LTIMindtree and rebranded to LTM in 2026 after the merger integration matured.
The company is backed by Larsen & Toubro and provides services in cloud computing, AI, cybersecurity, digital engineering, analytics, and enterprise applications.
FII Holdings – LTM
| Sept 2025 | 6.40% |
| Dec 2025 | 6.51% |
| March 2026 | 6.63% |
Source: Equitymaster
FII holdings in LTM rose steadily from 6.4% in September 2025 to 6.63% in March 2026. This gradual increase suggests improving foreign investor confidence. However, the rise is modest.
Moving on, the company is gravitating heavily towards AI. In a recent earnings presentation, the management revealed the launch of BlueVerse, the agentic AI ecosystem, has begun to accelerate its clients’ concept-to-value journey and serves as the foundation for AI-centric capabilities.
In parallel, the company has secured some of the largest deals in its history, expanded order intake consistently, and entered FY27 with a robust pipeline.
During Q4 FY26 the order inflow remained stable, closing at US$ 1.7 bn. This marks the sixth consecutive quarter with inflows exceeding US$ 1.5 bn.
The company has also been winning large AI related orders. It won an enterprise-wide engagement with a US-based global financial institution to drive AI-led reimagination and implementation of business processes as part of a broader operating model transformation.
LTM was also selected by a US-based global enterprise software provider as a strategic services partner to drive the AI-led digital transformation and AI-driven platform enablement across its enterprise customer ecosystem.
The company’s strategy is anchored in an AI-led foundation built on future-ready talent, reimagined delivery, and structurally improved productivity.
Happy investing.
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