Indian Computer Vision Stocks Could Pave the Next Phase of the Deep Tech Revolution

Every once in a while, you hear about an idea, and you can't stop thinking about it.

This happened recently while I was speaking with our analysts over a team lunch.

As we were talking about India's deep tech ecosystem, the potential impact on various industries, and measurable traction so far, Co-head of Research at Equitymaster said a couple of interesting things...

Highlighting key deep tech trends for the next 10 years, Tanushree highlighted these 10 technologies will have multi-prolonged use cases.

• Machine Learning
• Robotics
• Quantum Computing
• Blockchain
• Biotechnology
• Lifesciences
• Language Processing
• Photonics and Electronics
• Computer Vision

In today's article, we'll take a look at Computer Vision technology and the startups, stocks powering this revolution.

This technology, which empowers machines to "see" and understand the world through visual data, is rapidly gaining traction in India.

Computer Vision: The Basics

It's a branch of artificial intelligence (AI) that allows computers to interpret and understand the visual world through digital images and videos.

Here's a simplified breakdown of the process:

1. Seeing the World: Cameras, smartphones, and other visual sensors capture images and videos, providing the raw data for CV systems.
2. Making Sense of the Data: Just like our brains process visual information, CV systems use powerful algorithms to analyse the captured images. Techniques like image filtering and feature extraction help identify key elements within the image, like shapes, colours, and patterns.
3. Learning Through Experience: A crucial aspect of CV is machine learning. By training on massive datasets of labelled images and videos, CV models learn to recognize objects, faces, scenes, and even actions within the visual data.
4. Taking Action: Based on the extracted information, CV systems can make decisions, generate insights, or even trigger specific actions.

Why Computer Vision Offers an Edge

Automation & Efficiency: CV automates numerous tasks that were previously time-consuming and labour-intensive for humans. This includes everything from image classification and object detection to surveillance and quality control.

Enhanced Accuracy: In many tasks, CV systems outperform humans in accuracy.

Data-Driven Insights: CV systems extract valuable insights from images and videos. This can include customer behaviour analysis in retail, patterns in medical scans for disease prediction, or optimising traffic flow analysis.

Innovation Catalyst: Computer vision unlocks entirely new possibilities. Self-driving cars, automated medical diagnosis tools, and interactive augmented reality (AR) experiences are just a few examples of the transformative potential of this technology.

The Challenges to Overcome...

Data Quality and Bias: CV algorithms heavily rely on training data. Low-quality, biased, or insufficient datasets can lead to inaccurate models and perpetuate discriminatory outcomes.

Complex Environments: The real world is complex and ever-changing. Challenges like poor lighting, occlusions (objects blocking one another), and unusual camera angles can hinder the performance of CV systems.

Explainability: Complex CV models, especially those using deep learning, can sometimes become "black boxes," where understanding the exact decision-making process becomes difficult.

Privacy Concerns: The widespread use of CV technology, especially for surveillance and facial recognition, raises concerns about data privacy and potential misuse.

Why India, and Why Now?

Tackling 3D Understanding: While early CV focused on 2D images, recent advancements tackle the complexity of 3D object recognition and scene reconstruction. This is crucial for robotics, augmented reality (AR), and autonomous navigation.

Medical Breakthroughs: AI-powered medical imaging analysis is rapidly improving diagnostics, disease detection (even in early stages), and supporting surgical procedures with real-time image guidance, leading to better patient outcomes.

Precision Manufacturing: Advancements in CV for defect detection, predictive maintenance and robotic control are making Industry 4.0 a reality, leading to greater efficiency and product quality.

Human-Computer Interaction: More intuitive and natural forms of interaction are on the horizon, with gesture recognition, gaze tracking, and emotion detection powered by CV. This will reshape how we use our devices.

Generative CV: Systems that can generate new, realistic images or videos are evolving rapidly. This has applications in everything from creative content production and photorealistic image editing to stimulating environments for training self-driving cars.

India's Computer Vision Hotshots

First, let's look at the startups involved in this space before moving to the listed companies operating in this sector...

#1 Netradyne

NetraDyne, founded in 2015, is a leading provider of AI-powered fleet safety solutions that leverage computer vision and edge computing. The company's flagship product, Driveri, is a camera-based system that significantly enhances driver and road safety.

Recently, it announced its collaboration with IndianOil Skytanking, India's foremost aviation fuel management and airline fueling service provider.

It also announced its collaboration with taSki Technologies, a prominent corporate and individual mobility provider that deals exclusively with electric vehicles (EVs)

#2 SensoVision

SensoVision is one of the first Indian companies to successfully provide vision based optical sorting machines for sorting fasteners and automotive components based on visual and dimensional based defects.

The company is based in Bengaluru.

#3 MintM

MintM is an Indian company specialising in AI-powered document processing and data extraction solutions. Their technology helps businesses automate the traditionally manual and time-consuming process of digitising information from various documents.

MintM has secured funding through multiple rounds, with notable investors including Accel Partners and Tiger Global Management

#4 Playment

Playment is an AI-driven retail analytics company that uses computer vision to analyse customer behaviour within brick-and-mortar stores.

Their insights help retailers optimise store layouts, improve product placement, and enhance customer experience.

#5 Sigtuple

Sigtuple is an Indian healthtech company that uses AI to make medical diagnostics more accessible, accurate, and affordable.

They develop AI-powered solutions for analysing medical images and data, primarily focusing on pathology and radiology.

Sigtuple has developed an AI platform called "Shonit" that analyses various medical images, including blood slides, X-rays, and scans from devices like CT scans or MRIs.

Sigtuple is headquartered in Bangalore, India.

The company recently received USFDA approval for its blood smear application.

Indian Listed Companies Operating in the Computer Vision Segment

Apart from these startups, here are the listed Indian companies operating within the computer vision segment.

1. Tata Consultancy Services
2. Tata Elxsi
3. Saksoft
4. Persistent Systems
5. Happiest Minds
6. Affle India
7. Kellton Tech
8. OFSS

In Conclusion

India's computer vision landscape is brimming with potential.

A confluence of factors - a robust IT sector, government support, industry demand, and a growing pool of data - is fueling innovation and attracting significant investment.

Early movers like NetraDyne (fleet safety) and Intello Labs (agricultural quality) showcase the diverse applications of CV across industries.

These companies, along with others like Playment (retail analytics) and MintM (document processing), demonstrate the ability of Indian CV firms to not only compete but thrive globally.

For investors seeking exposure to high-growth, transformative technologies, Indian CV presents a compelling opportunity.

Here's what Tanushree Banerjee wrote in her recent editorial:

The bulk of these startups are looking to raise money by way of IPOs over next few years.

As investor you must evaluate these stocks not just on the basis of profitability but also the possibility of their frothy valuation.

Like Howard Marks wrote in his recent memo...

• One of the quotes I return to most frequently is Mark Twain's purported observation that "history doesn't repeat itself, but it often rhymes." For investors, cycles, along with their causes and effects, are among the influential matters that invariably rhyme from one period to the next.

In the meantime, here is a list of deeptech stocks that can be on your watchlist.

Happy Investing.

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here.