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Top AI Sector Stocks may benefit from the Interim Budget 2024

  


Top AI Sector Stocks may benefit from the Interim Budget 2024

The government of India in its recent interim budget just announced a massive investment in sectors they believe will flourish in the upcoming future and one of them was the Sunrise sector. It is something similar to seeds with incredible growth potential. But what exactly are these sunrise sectors, and why is the government investing so heavily in them. In this blog we will explain all of this to you in simple terms.

 

Understanding Sunrise Sectors

Think of "sunrise" as the start of something new. In the world of economics, it refers to industries in their early stages that are full of potential. Imagine the sun rising and giving light to exciting new possibilities. Examples include semiconductors, electric vehicles (EVs), and Artificial Intelligence (AI). These are the areas where the government is ready to spend huge money to fuel their growth.

 

Detailed Video

 

The Big Budget Move

On February 1st, the government unveiled a game-changing budget of ₹1 trillion for sunrise sectors. And guess what this money comes with a 50-year interest-free period. This is a huge push to boost research and development in these fields and encourage private companies to join the party.

 

Importance of Innovation

Think of global giants like the US. They're investing heavily in research and development. There's a fierce international race to be the leader in advanced technologies like semiconductors and AI. India's government, recognizing the need to stay ahead of the curve, is planning to triple its investment in research and development, from 0.7% to 3% of the total GDP.

 

AI: The Rising Star:

Within these sunrise sectors, Artificial Intelligence stands out as a key player. The Finance Minister highlighted that the budget allocation would accelerate research and innovation in AI, making it a sector to watch closely. But why the focus on AI?

 

 

AI's Role in Faster Growth

AI is like a superpower for research and development. It can speed up data collection and analysis, enhance experimentation, and drive innovation across various fields. The government's investment is strategically aimed at harnessing this power to boost research and development efforts.

 

Potential for Growth in AI Industry

The Indian AI industry is already growing rapidly, with a market size of $3.1 billion in 2020 and expected to reach $7.1 billion by 2025. This, coupled with the government's massive funding, positions India as a sector with huge potential.

 

 

Stocks to Watch

For investors eyeing opportunities, two companies are particularly interesting: TATA Elxsi and KPIT Technology.

1. TATA Elxsi

Tata Elxsi, a global design and tech leader, serves industries like Automotive, Media, Communications, and Healthcare, providing integrated services from research to deployment.

Key Specification:

  • Offers tech consulting and development for automotive, broadcast, healthcare, etc.

  • Works with top companies in automotive and transportation for R&D and product engineering.

  • Helps clients create innovative products and experiences.

  • Services include consumer research, branding, graphics, and product design.

  • Achieved over Rs. 100 crores in revenues for Q2FY24.

 

2. KPIT Technology

KPIT is a global tech company passionate about shaping the future of clean, smart, and connected mobility. KPIT specialises in software, AI, and digital solutions to speed up the adoption of next-gen mobility tech. They have development centres in Europe, USA, Japan, China, Thailand, and India.

Key Specification:

  • Leading in software development, testing, and connected services.

  • Specialised in Feature Development, Architecture Consulting, and Cloud-based solutions.

  • Formed through a deal with Birlasoft and KPIT Technologies.

  • Aimed at separating IT and Engineering Services business through restructuring.

 

 

Conclusion

India's push for sunrise sectors through its budget allocation is a giant leap towards becoming a global technology leader. As the nation embraces these bright new fields, particularly AI, investors have a unique opportunity to be part of this transformative journey. Remember, thorough research and consulting with financial experts are crucial before making any investment decision.

 



Frequently Asked Questions

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The finance minister, Nirmala Sitharaman, did not alter the income tax slabs for the 2024–25 fiscal year (April 1, 2024–March 31, 2025) in the interim budget 2024.

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No.



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