Top 5 Automation Stocks to Add to Your Watchlist

It was a chilly morning in late 2020 when the world woke up to a subtle, yet monumental shift. In a quiet factory on the outskirts of Tokyo, a single robotic arm was putting the final touches on a car's frame, while a team of engineers watched from afar.

What made this scene different from the countless other assembly lines was the absence of humans on the floor.

The factory ran entirely on algorithms, robotics, and artificial intelligence (AI), with machines doing the heavy lifting, making decisions, and even optimising production without a single human instruction.

That day marked the beginning of a new era - one where automation wasn't just supplementing human effort but replacing it altogether.

Fast forward to 2024, and automation is no longer confined to factory floors.

From the AI-driven recommendation engines that predict your next favourite Netflix show to self-driving cars that promise to redefine urban mobility, automation has crept into every corner of our existence.

The world is evolving faster than we could have imagined, and at the heart of this transformation are a handful of companies, creating technologies that are pushing the limits of what's possible.

Today, we'll look at the top automation companies in India that are truly pioneers.

#1 Siemens Ltd.

First on this list is Siemens.

The Indian arm of the largest industrial manufacturing company in Europe, Siemens India operates as an electric equipment manufacturer.

With its roots in electrical engineering, Siemens has transitioned into automation by offering cutting-edge solutions in areas such as smart infrastructure, digital industries, and intelligent mobility.

Siemens' broad product portfolio covers everything from factory automation to smart grid solutions.

In recent years, Siemens has been actively pushing its automation division, especially with a focus on AI-driven processes and IoT integration. The company is capitalizing on India's drive for smart manufacturing and digital transformation across sectors.

It has a long history of providing cutting-edge railway technology, making it a valuable partner for Indian Railways.

Apart from railways, the company also has its toes dipped in the growing electric vehicles (EVs) industry.

The recent earnings report of Siemens suggests that it's all set for another year of bumper earnings as private capex turns around the laggard cycle.

The company's order book and earnings growth anticipated over the next two years suggests that the best is yet to come.

To know more, check out Siemens' financial factsheet.

#2 ABB India Ltd.

ABB India, a subsidiary of the Swiss-Swedish multinational, is a leader in electrification, automation, robotics, and motion technologies.

The company has been at the forefront of India's industrial automation transformation, providing solutions for sectors like energy, transportation, and manufacturing.

In 2023, ABB saw strong order inflows, notably in the robotics and automation sectors, as industries ramped up digitization efforts.

The company's focus on sustainable automation solutions, such as energy-efficient motors and smart grids, aligns perfectly with India's growing demand for cleaner and more efficient technologies.

Going by its latest earnings call and management commentary, ABB India has highlighted data centre segment as a key growth area, and it has already secured some large contracts.

Starting with a 100-megawatt project about seven years ago, ABB has also expanded its footprint in the renewable energy industry, contributing to over 300 projects utilizing its IoT-based Programmable Logic Controller (PLC) solution.

These automation solutions are crucial for optimizing the performance of renewable energy plants, including solar, wind, and BESS.

To know more, check out ABB India's financial factsheet.

#3 Oracle Financial Services Software (OFSS)

Oracle Financial Services Software (OFSS), part of the global Oracle Corporation, specializes in providing IT solutions to the financial services industry.

While not traditionally seen as an industrial automation player, Oracle's cloud-based automation tools and AI-driven data management systems are transforming the way banks and financial institutions operate.

From automating customer service via AI chatbots to deploying machine learning algorithms for fraud detection, the company is deeply embedded in the financial automation space.

The company has a diversified revenue base with not much concentration in a single geography. It derives 23% of its revenues each from USA and Asia Pacific, 20% from Middle East and Africa, 17% from Europe, 10% from India, and the balance 7% from rest of America.

The company's parent recently announced a robust forecast for 2025, expecting revenue growth in double digits, surpassing market expectations.

Additionally, it revealed a strategic partnership with OpenAI, the creator of ChatGPT. This collaboration aims to expand the company's cloud infrastructure offerings, enhancing its service capabilities for customers.

To know more, check out OFSS financial factsheet.

#4 Persistent Systems Ltd.

Persistent Systems is a homegrown leader in IT services, specialising in digital transformation, including automation, cloud, and AI.

Founded in 1990, the company has shifted from being a software services provider to a key player in automation solutions for industries such as healthcare, finance, and manufacturing.

It has a global presence in more than 21 countries across the world.

Geographically, the company derives 80% sales from North America market, 9% revenues from Europe, 10% from India, and balance 1% from rest of the world.

The company recently announced an intent to acquire 100% stake in US based software firm Starfish Associates for a consideration of US$ 20.7 million. Known for its cutting-edge enterprise communications automation platform, Starfish caters to world's largest enterprises including many Fortune 500 companies.

To know more, check out Persistent Systems' financial factsheet.

#5 Tata Elxsi

Tata Elxsi, part of the Tata Group, is a global design and technology services provider, focusing heavily on engineering services and product design automation.

The company's expertise lies in integrating automation into consumer electronics, automotive, healthcare, and media. Its automotive solutions, particularly in autonomous vehicles and connected cars, are driving much of the revenue growth.

In FY23, Tata Elxsi saw significant order inflows for automation in connected devices and industrial IoT.

Over the years, the Tata group company has stayed at the forefront of technological advancements, and it continues to do so even now.

It's investing heavily in digital, generative AI technologies, IoT, etc. to enhance efficiency, improve product quality and develop innovative solutions for complex business challenges.

To this end, it is targeting a significant increase in its AI-ready talent pool. By December of this year, the company aims to have 25% of its employees equipped with the necessary skills to leverage AI effectively.

As industries shift towards greener practices, Tata Elxsi's engineering services are becoming increasingly essential for automotive manufacturers seeking to reduce emissions and improve fuel efficiency.

For more, check out Tata Elxsi's financial factsheet.

In Conclusion

Apart from the above five, there are several other prominent names in the automation industry.

Honeywell Automation, for instance, is a global leader in industrial automation, offering advanced solutions in aerospace, energy, and manufacturing segments.

Jyoti CNC Automation, a recently listed company, continues to make impressive contributions with its precision manufacturing technologies.

Then there's Happiest Minds Technologies, making waves in the digital automation sector, focusing on smart manufacturing and IoT-driven solutions.

Similarly, Kellton Tech is innovating through its cloud automation and AI-powered platforms.

Moreover, Affordable Robotic & Automation is also rapidly emerging as a promising player, providing cost-effective robotic automation solutions to various industries.

In conclusion, India's romance with automation is far from over; in fact, the most exciting chapters are yet to be written.

This is a technological wave with the potential to reshape industries and lives. The savvy investor would do well to stay ahead of the curve and track the fundamentally strong companies within this space.

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.