India is keen to dethrone China as the technology king. In light of the country’s ambition, here is a collection of stocks poised to benefit from growth in India’s technology industry.
The Generative AI Stock
Infosys [INFY] announced last week that it had teamed up with Microsoft [MSFT] to accelerate the development and adoption of generative AI. The partnership will see the two parties develop AI solutions powered by Infosys Topaz, Azure OpenAI and Azure Cognitive Services.
“Infosys Topaz is empowering businesses with improved operational efficiencies and reduced time-to-market for launching new products and services,” said Infosys Executive Vice President and Global Head of AI and Automation, Balakrishna DR, in a statement.
Earlier in September, the IT solutions provider said it would train 50,000 employees on Nvidia [NVDA] technology so they can gain generative AI skills and knowledge.
The Data Centre Stock
Leading communication services provider Bharti Airtel [BHARTIARTL.NS] agreed to acquire stakes in two renewable energy companies at the start of September.
The agreements will see Airtel purchase 23,000 MWh of renewable energy by the end of the current fiscal year, and will help the company to power six data centres owned by its subsidiary Nxtra, as well as expand its green energy footprint.
Nxtra, one of the largest data centre operators in India, is aiming to become net-zero by 2031, according to CEO Ashish Arora.
The Food Delivery Stock
Joining the generative AI hype train, food ordering giant Zomato [ZOMATO.NS] has recently launched an AI chatbot. The “intelligent, intuitive, and interactive foodie has been meticulously designed to assist [customers] in placing orders” by making recommendations, according to a press release issued 1 September.
Zomato reported a net profit for the first time in the first quarter of 2024 and is confident that the trend will continue over the next four quarters, according to the earnings release. “We have been working hard to make our business less complex, and putting the right people at the right spots within our businesses,” said CEO Deepinder Goyal.
Tata Consultancy Services
The Digital Transformation Stock
IT services provider Tata Consultancy Services (TCS) [TCS.NS] has a long-standing partnership with Jaguar Land Rover (JLR), which it expanded in September with the announcement of an approximately £800m investment in the British carmaker’s IT operations over the next five years.
TCS will “help manage and transform [JLR’s] digital estate and build a new, future-ready digital core that will support [its] reimagine strategy and electrification plans,” according to a press release.
TCS also works with major financial institutions — South Africa’s Standard Bank has just selected the company to transform its custody and settlement operations.
The Online Travel Stock
The online travel booking company MakeMyTrip [MMYT] has seen a surge in bookings ahead of the 2023 Cricket World Cup in India, which starts this week. CEO Rajesh Magow told Indian business news channel CNBC-TV18 that the company has strengthened its supply of rentals and accommodations across match venues.
Back in May, MakeMyTrip announced a collaboration with Microsoft to bring voice-assisted bookings for Indian languages to its platform. Generative AI is also being used to improve the customer experience, by “building conversational capabilities to put people at ease before they make a holiday purchase,” according to CTO Sanjay Mohan.
Another Way to Invest in India Tech
The VanEck Digital India ETF
ETFs, or exchange-traded funds, offer an economical and diversified way to invest in a variety of stocks within a particular theme.
The VanEck Digital India ETF [DGIN] holds all five of the stocks. Its portfolio allocates 54.72% to the information technology sector, while communication services accounts for 14.28%. Financials and consumer discretionary have weightings of 8.48% and 7.36% respectively, and industrials and energy 7.25% and 7.15% respectively. The fund is up 18.9% in the past year through 27 September and up 22.1% in the past six months.
The India Internet and Ecommerce ETF [INQQ] currently holds Zomato and MakeMyTrip. As of 30 June, fintech accounted for 31.21% of the portfolio, while ecommerce and food delivery had been allocated 16.62% and 11.72% respectively. Travel services and SaaS had weightings of 10.58% and 9.21% respectively. The fund is up 10.6% in the past year and up 31.2% in the past six months.
Disclaimer Past performance is not a reliable indicator of future results.
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