Best Cloud Computing Stocks in India 2023
Cloud computing has become a must have tool for all the companies that are dependent on technology to deliver their services. Cloud computing refers to using hardware of a different entity, provided through internet, to make available one’s service. Most information technology companies now have a separate cloud computing team for increased specialisation. Some of them are providing technology for cloud computing, some cloud infrastructure services like hosting on cloud and some both. As more and more companies adopt cloud computing, revenues and consequently, stocks, of firms offering such services have seen significant growth.
In this article, we will explore technical metrics of some of the top cloud computing stocks in India and compare them with peers.
What are Cloud Computing Stocks?
Most of top Indian software services providers have fast adopted cloud computing and are now offering their clients highly sophisticated tool and infrastructure for such services.
Broadly speaking we can categorize cloud computing companies into five categories:
Cloud infrastructure providers: They own the hardware of the cloud computing that can be hired by anyone to host their services.
Software-as-a-Service providers (SaaS): These companies deliver their common services over cloud instead of client’s desktop or servers.
Platform-as-a-Service providers (Paas): These firms offer platform on cloud that others can use to build a service.
Cloud security: With increase in cloud computing many companies are now offering services that are specialised in security of work hosted on cloud.
Data Centres: Data centres provide space to store huge computing capabilities.
List of top Cloud Computing Stocks and their Overview
Tata Consultancy Services: TCS has partnered with most cloud hosting companies such as Amazon, Microsoft Cloud and Google Cloud to offer its tools. It recently also won three Google Cloud Partner of the Year awards. The stock of TCS is near 52-week high and has been above short-, medium and long-term averages too. Shares of India’s biggest software services company has seen upgrades brokers in the past three months.
Infosys: The company claims to have built strong position in digital computing, and its main driver for growth has been cloud. It has partnered with most cloud infrastructure providers, including a tie-up with Microsoft Azure. The stock of Infosys is trading above short and long-term averages and has got upgrades from some brokerages recently. However, the stock also saw a negative breakdown below first support in recent past.
Wipro: Another one of the legacy software services firms of India that was quick to latch on the cloud computing bandwagon, Wipro too has been able to harness the strength of the new technology for its customers. The stock’s book value per share has been improving for last 2 years but it has seen a negative breakdown from first support level and has also seen waning support from mutual funds.
Tech Mahindra: The company is banking on its cloud-powered 5G services to lift growth in the next few years. The stock of is near 52-week high and above short-, medium and long-term averages. It has also got upgrades from brokers in the recent past. MFs, however, decreased their shareholding in the company in last quarter.
Tata Communications: The company recently launched cloud-based roaming lab for 5G tests by telecom services company. Like Tech Mahindra, Tata Communications too is banking on 5G on cloud to lift growth. The stock is near 52-week high and above the short-, medium and long-term averages. Brokers have also upgraded the stock in the past three months, though high debt continues to be a bugbear.
L&T Technology Services: The company has seen increased FPI/FII shareholding and the stock is near 52-week high. It is also ruling above long-term averages with positive breakout above second resistance. It also has high Piotroski score with, and high return on equity and EPS growth.
MphasiS: The stock is a 52-week high and above long-term averages. Fundamentals of the company have improved further with earnings matching expectations, earning upgrade from brokers on target price. The stock has also seen positive breakout from first resistance.
Happiest Minds Technologies: The company has managed to gain a foothold in the sector despite being a late entrant thanks to its marquee promoters. Fundamentals of the company have stayed strong but it has low Piotroski Score and has also seen decline in net cash flow.
Birlasoft: The company has been able to garner increasing interest from FPI/FIIs and the stock has seen positive breakout from first resistance. According to some reports there has also been insider buying in the stock and upgrades in target price by brokers.
Blue Cloud Softech Solutions: One of the multibagger stock of 2023 the stock has seen high EPS growth. It has also showed highest recovery from a 52-week low.
Why to Invest in Cloud Computing stocks in India?
Cloud computing has changed the way people do business and use their IT infrastructure. It has led to companies moving their application to the Net and save money in the long run. Indian software companies have been able to deliver the cloud computing need of their clients and hence seen increasing revenue from such verticals. As more clients adopt cloud computing, Indian IT stocks will reap the advantage.
Factors to Consider Before Investing in Cloud Computing Stocks in India
Cloud computing, undoubtedly is going to be mantra of growth, both for IT companies and their clients. An investor looking to put fund into such companies must consider the following factors before investing in cloud computing stocks:
Business model: One should carefully evaluate if the company is putting its efforts into the right cloud computing (SaaS, PaaS etc) and whether it has the potential to grow in that area. Also, partnership with big boys of cloud computing like Amazon, Microsoft and Google helps.
Fundamentals: Investment into a stock should be done only after thorough checks into the earnings, debt and other parameters of financial health of a company.
Competition: Invest into a company that has some kind of leverage over its peers and has gained substantial market share.
Client base: A company with a wider client base is better than one that leans heavily on few clients.
Performance Overview of Cloud Computing Stocks in India
Companies are making big investments into cloud computing as it helps them focus on their core job without bothering about related hardware and eases accessibility of their services . Cloud computing stocks offer long-term play, but investors should be careful and should not take short cuts in due diligence for each stock they invest into.
Frequently Asked Questions
Which Indian Companies are investing in Cloud Computing Sector?
All top Indian IT companies have made investments into cloud computing.
What is the future of Cloud Computing in India?
Cloud computing is here to stay in India due to the edge it offers over peers.
Is investing in Cloud Computing stocks good idea?
Yes, but it should be done after through due diligence.
How can I invest in Cloud Computing stocks using 5paisa App?
First zero in on the cloud computing stocks that you want to invest in and the amount of investment in each of them. Then log into 5paisa app, check the current market prices and then place buy order for the stocks.
DisclaimerInvestment/Trading in securities Market is subject to market risk, past performance is not a guarantee of future performance. The risk of loss in trading and investment in Securities markets including Equites and Derivatives can be substantial.
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