Stocks that Could be India's Nvidia 

Faridabad-based Indian original equipment manufacturer (OEM) in high-end computing, Netweb Technologies has been in the news.

It recently announced a manufacturing partnership with American tech major NVIDIA.

The latter is a global leader in AI computing and involved in making advancements in robotics and gaming. The stock's 1,400% gains since 2020, and US$ 2 trillion marketcap has prompted global investors to flock to it.

Netweb, meanwhile, operates a manufacturing facility in Faridabad, Haryana, and has 16 offices across India.

Two of Netweb Technologies' supercomputers have been listed 10 times in the world's top 500 supercomputers.

The company plans to build and produce more than 10 server variations under its AI systems range, called Tyrone. Tyrone is utilised for a wide range of AI and high-performance computing and supercomputing applications.

Netweb caters across various end-user industries. Key among them are IT-enabled services, entertainment and media, banking, financial services and insurance (BFSI), national data centres, and government entities in defence, education, and R&D.

This suggests the wide nature of Netweb's customer base in India and deep penetration of its offerings. Having been set up nearly 24 years back, the company's relatively new listing camouflages its deep understanding of its customer requirements.

This is not the only company that has been around for decades yet got recognition for its niche offerings very recently.

CE Info Systems (popularly known as MapMyIndia) has been collecting data for about 30 years.

The company initially built the digital footprint of the available offline maps. Later, they physically surveyed the area, visiting different parts of the country.

In the past 30 years, MapMyIndia has successfully built a repository of more than two crore data points, including navigation systems, telematics, and 3D data visualisations.

The company claims to have mapped more than 10.8 m distinct locations (points of interest), carried out coverage of more than 2.2 m kilometres of roads, 7,268 cities at the street level with home address level data for 94 cities and 5.79 lakh villages.

The reason I am referring to the stocks of CE Info Systems and Netweb Technologies is because they are among the frontrunners in India's deep tech revolution.

This revolution could gain momentum as the Indian government and corporates aim to move into a higher orbit of digital evolution.

Launched in 2015, the Digital India programme aims to enable digital delivery of services to citizens.

Among a number of other key initiatives, it also proposes nine more supercomputers to be added under the National Super Computer Mission.

The Digital India programme is one of the key programs expected to gain prominence in the first 100 days of the new government in India later this year.

To boost tech related sectors such as semiconductor chips, artificial intelligence, data security etc, the 100-day programme will look for companies that can fortify India's deeptech foray.

The government has already announced Rs 1 trillion corpus for financing private sector research and innovation in sunrise sectors.

In addition, there are production incentives (PLIs) for manufacturing AI-led electronics, electric vehicle batteries, chips, medical devices, and drones.

It is for this reason NVidia's CEO Jensen Huang recently said...

• India's IT will be the 'front-office' of world's AI revolution. - Nvidia's CEO Jensen Huang

Back in 2023, I told you that a trillion dollars of installed global data centre infrastructure will transition from general purpose to accelerated computing over the next few years.

Because companies globally are racing to apply generative AI into every product, service and business process.

Nvidia has been working on generative AI with tech behemoths Amazon, Microsoft, and Google.

It has been partnering with cloud-computing companies to help make generative AI available to smaller businesses.

However, companies like CE Info Systems and Netweb Technologies have decades-old penetration into India's deeptech ecosystem.

They are well placed to develop and assist in gen AI technologies that can support niche businesses in the country.

As investors, we should therefore, be wary of overpaying for stocks that promise near term upside due to global technology trends.

Rather some home-grown deep tech business could be better placed to cater to the needs of Indian businesses in the years to come.

According to a Nasscom, there are over 3,000 deeptech startups in India growing at over 53% per annum over the last decade. These startups currently account for 12% share in the Indian startup ecosystem.

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

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

Do check out the watchlist for Deeptech stocks on the Equitymaster Screener.

Hope you like this video, Thanks for watching.