4 Digital India Stocks to Add to Your 2022 Watchlist

The ‘Digital India’ campaign was launched in 2015 by the Government of India to improve the digital and online infrastructure in the country. It aims to promote the provision of government services to citizens electronically.

As a part of this initiative, the government plans to improve connectivity in rural areas with facilities like high-speed internet.

Make no mistake, this is a megatrend happening before us. As the Digital India megatrend picks up pace, there will be companies that will benefit from it in the years to come. Last year in October 2021, we wrote to you about Top 5 ‘Digital India’ Stocks,

In the article, we have listed ITI, Sterlite Technologies, Tech Mahindra, RailTel Corp, and Nelco.

Let’s take a look at some other stocks that are riding India’s Digital India megatrend…

These companies are leading and taking advantage of the digital revolution in India.

#1 Scient

With its distinctive offering in domains such as aerospace and defence, communications, transportation, and semiconductors, Cyient has established itself with healthy growth over the years.

The company is working on many fronts towards digital transformation.

In the last fiscal year, Cyient acquired Cyient DLM to provide systems integration and prototyping capability across its engineering services, thus enabling it to provide design-to-production solutions to customers.

Cyient’s recent acquisition of WorkForce Delta already strengthens its digital solutions suite, IntelliCyient.

The company has also expanded its digital solutions portfolio for the aerospace industry. In addition, it has also tied up with leading industry forums such as the TM Forum to accelerate technology-led transformation.

The company also achieved a select level position in the Amazon Web Services (AWS) partner network with its emerging expertise in digital transformation solutions.

From humble beginnings as a GIS data conversion vendor, Cyient has grown into a formidable engineering player operating in critical sectors such as aerospace, defense, communications and utilities – which, incidentally, contribute a lion’s share to the company’s overall revenue. We do.

The company’s shares have gained 43% in the past one year as compared to the BSE Sensex’s gain of 21%.

#2 HFCL

Next on our list is Himachal Futuristic (HFCL), a diversified telecommunications infrastructure company, engaged in telecom infrastructure development, systems integration, and manufacturing and supply of high-end telecommunications equipment, optical fiber and optic fiber cables (OFC). with interest.

How does HFCL become a part of this list? The company has good growth prospects for the next few years as fiber optics is one of the main requirements when India switches to 5G network.

The demand for OFC will continue as 5G trials are already underway. More recently, HFCL announced that CommAgility’s new 5G radio software will be used in its 5G indoor small cell.

The company also has close ties with Jio which strengthens its link to Digital India initiative.

Indian Telecom Sector is at a turning point. In the annual report, the company mentions that as the Indian government focuses on rural connectivity through the Digital India drive, HFCL is gearing up for the next major upgrade.

HFCL’s dedicated R&D center is developing a next-generation 5G and Wi-Fi product portfolio and system integration services.

Having the largest market share in OFC supplies in India and being the largest producer of Wi-Fi systems, HFCL is poised to grow by leaps and bounds.

It’s no surprise that investors are already factoring in the tailwinds of digitization. Take a look at the chart below. This reflects the stellar performance of HFCL on the stock exchanges.

#3 TCS

Now this is a no brainer. You must have probably thought of Tata Consultancy Services (TCS) when you started reading this article.

In its latest quarterly results presentation, TCS said it believes the Indian market will be platform-driven as more businesses and government entities digitize their processes.

TCS chief N Ganapathi Subramaniam said the company is positioning itself to provide apps and platforms to integrate with India’s digital stack and provide solutions to customers across government, industry and even B2C.

Most of the IT companies, be it large or medium sized, have worked towards increasing their digital reach, with the top 2 companies – Infosys and TCS making the best use of this opportunity. Both companies have bagged major government projects and offered their platform.

Both companies have consistently raised revenue forecasts, with tech spending especially for digital services like cloud expected to continue.

TCS shares have gained 12% in the last one year, while Infosys has outperformed with a gain of 28%.

#4 Tata Alexi

Another Tata group company to be included in this list is Tata Alexi.

The company is already witnessing significant growth in all the priority areas it operates through digital transformation. In the automotive market, Tata Alexi has bagged large and strategic deals with both OEMs and suppliers in the electric and autonomous segments.

Tata Alexi is one of the world’s leading providers of design and technology services across industries including auto, media, communications and healthcare.

From Artificial Intelligence (AI), Internet of Things (IoT), Big Data Analytics, Cloud, Mobility, Virtual Reality, Driverless Cars, Electric Vehicles (EV) to Semiconductors – the company is riding a megatrend of many new-age technologies .

As the company offers opportunities on new-age technologies, the post-pandemic scenario has magnified the opportunity. As Tata Alexi focuses on high growth areas and emerging technology sectors, its growth story remains intact.

This can be gauged from its stock price performance. Even though the company is trading at an expensive valuation, investors are betting big on the future of the company.

Going forward, Tata Alexi hopes to leverage the digital push set up by the pandemic.

Snapshot of digitizing stocks in India from Equitymaster’s stock screener

Here’s a quick look at companies focusing on Digital India based on critical financials.

Please note that these parameters are subject to change as per your selection criteria.

This will help you identify and eliminate stocks that are not meeting your requirements and emphasize stocks that are well within the metrics.

Is there an index that tracks Digital India stock?

In December last year, NSE Index, a subsidiary of NSE, had launched a digital index that tracks the performance of companies exposed to the digital theme.

The index aims to track the performance of a portfolio of stocks that broadly represent digital themes within core industries such as software, e-commerce, IT-enabled services, industrial electronics and telecommunications service companies.

Digitization is happening rapidly and is touching every aspect of our lives.

Companies are accelerating the pace of change to further promote the digital theme. For example, RailTel Corporation is setting up Edge Data Centers (EDCs) along with other partners. It aims to accelerate the pace of digital transformation and efficient digital delivery in rural and semi-urban areas.

RailTel has long been working with Indian Railways to transform railway stations into digital hubs by providing public Wi-Fi at railway stations across the country.

Meanwhile, India got another boost today as Google has partnered with Bharti Airtel. The company plans to invest approx. 75 billion to help grow India’s digital ecosystem.

As companies focus on shaping and growing their ecosystem to accelerate their digital transformation, India has emerged as the largest and fastest growing market for digital consumers.

With the rise in affordable smartphones and data consumption, India’s internet economy has witnessed a rapid growth in the last 5 years.

US$ 100 bn+ digital payments were recorded in India in 2021. The number of Internet users in the country grew by 8.2% (47 million) between 2020 and 2021.

Disclaimer: This article is for informational purposes only. This is not a stock recommendation and should not be treated as such.

This article is syndicated from equitymaster.com