Best Artificial Intelligence Stocks in India for May 2025: Persistent, KPIT Tech and More 5Y CAGR Basis

Investing in artificial intelligence (AI) stocks in India presents a unique opportunity for investors looking to tap into the country’s rapidly growing tech sector. As India continues to emerge as a global hub for innovation, the adoption of AI across industries like healthcare, finance, e-commerce, and manufacturing is accelerating, offering substantial growth potential for companies involved in AI research, development, and application.

The Indian AI market is expected to experience exponential growth in the coming years, driven by factors such as increasing investments in technology, government support for digital initiatives, and a large, skilled talent pool. Companies specialising in AI-driven products and services are well-positioned to benefit from this trend. In this article, we will explore the best artificial intelligence stocks based on 5Y CAGR.

Best Artificial Intelligence Stocks Based on 5Y CAGR 

Note: The best artificial intelligence stocks list here is as of May 02, 2025. The stocks are sorted based on the 5Y CAGR.

Overview of Top 5 Artificial Intelligence Stocks

1. KPIT Technologies Ltd

KPIT Technologies is a global frontrunner in automotive software, specialising in software-defined vehicles, powertrain solutions (both conventional and electric), autonomous driving, ADAS, connected vehicle technologies, and digital transformation. In Q4FY25, the company achieved a Year-over-Year (Y-o-Y) constant currency (CC) growth of 15% and a dollar growth of 11.5%. On a Quarter-over-Quarter (Q-o-Q) basis, the CC growth was 3%, while the dollar growth was 0.7%

Key Metrics:

• Return on Capital Employed (ROCE): 40.9%
• Return On Equity (ROE): 33.2%

2. Persistent Systems Ltd

Founded in 1990, Persistent Systems is a global leader in digital engineering, offering cutting-edge solutions in software development, cloud computing, AI, automation, and enterprise modernisation. The company serves key sectors such as BFSI, healthcare, telecom, and consumer technology, with a robust global footprint. The company has delivered its 20th consecutive quarter of revenue growth, achieving an EBIT margin of 15.6%.

Key metrics:

• ROCE: 31.4%
• ROE: 24.8%

3. Intellect Design Arena Ltd

Incorporated in 2011, Intellect Design Arena Limited works globally in the fields of Financial Technology for Banking, Insurance and other Financial Services. The company has signed a significant multi-year, multi-million-dollar deal with one of the UK’s leading financial institutions. This landmark engagement is driven by Intellect’s distinctive methodology that blends First Principles Thinking with Design

Key metrics:

• ROCE: 20.3%
• ROE: 14.7%

Key Factors to Consider Before Investing in Indian AI Stocks

1. Business Model and AI Integration: Assess how deeply the company integrates AI into its core offerings. Look for firms where AI is not just a buzzword, but a key revenue driver
2. Revenue Contribution from AI: Examine what percentage of the company’s revenue comes from AI-related services or products.
3. R&D and Innovation Capabilities: Strong R&D spending signals the company’s commitment to innovation. Evaluate the number of patents, proprietary platforms, or in-house AI tools developed.
4. Client Base and Industry Focus: Diversified clientele across BFSI, healthcare, retail, and manufacturing are a positive sign. Companies serving AI-intensive sectors are more likely to benefit from sustained demand.

Conclusion 

Investing in Indian AI stocks offers promising growth potential, given the country’s strong IT foundation and increasing global demand for intelligent solutions. However, the sector also carries inherent risks, including high valuations, rapid technological shifts, and regulatory uncertainties.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.