Top 5 Quantum Computing Stocks in India

Quantum computing, once considered a distant dream, is rapidly evolving into a transformative technology with vast applications across industries like cybersecurity, pharmaceuticals, and more.

Recent advancements suggest we are nearing a quantum leap in computational power, where problems that previously took years to solve could be resolved in mere seconds.

Major global tech giants, alongside agile startups, are pouring significant investments into quantum computing, focusing on both software and hardware development. These efforts are setting the stage for a new era of technological innovation and scientific breakthroughs.

While the US and China are currently leading the charge, India is emerging as a strong contender in the quantum computing race.

With growing government support and rising interest from private players, the country's quantum landscape is quickly expanding.

In this article, we take a closer look at the top 5 quantum computing stocks in India.

#1 TCS

First on the list is Tata Consultancy Services.

This Tata Group company is the largest IT services company in Asia.

With a global footprint and expertise across various industry verticals, TCS offers a comprehensive portfolio of services, including consulting, service integration, and application management.

In the realm of quantum computing, TCS has introduced the Quantum Value Discovery framework.

This initiative allows clients to embark on their quantum computing journey in a low-cost, low-risk manner. By partnering with AWS and conducting joint pilots, TCS helps businesses uncover value in quantum computing applications.

TCS is also focused on developing innovative quantum algorithms for a wide range of use cases, including quantum optimization, machine learning, chemistry simulations, and cybersecurity.

Additionally, the company is creating assets that can facilitate faster experimentation, benchmarking, and the development of quantum algorithms.

Through the TCS Quantum Computing Lab, which utilizes Amazon Braket-AWS's fully managed quantum computing service-TCS is at the forefront of designing cutting-edge solutions, establishing performance benchmarks, and organizing hackathons to drive innovation in the field.

For FY24 its revenue jumped 6.8% to Rs 2.4 tn, while net profit jumped 10.5% to Rs 465.9 billion (bn).

TCS Financial Snapshot (FY20-24)

(Rs m, Consolidated)	FY20	FY21	FY22	FY23	FY24
Revenue Growth (%)	7.2	4.6	16.8	17.6	6.8
Operating Profit Margin (%)	0.3	0.3	0.3	0.3	0.3
Net Profit Margin (%)	20.7	19.8	20.1	18.8	19.1
Return on Equity (%)	38.6	37.7	43.1	46.8	50.9
Return on Capital Employed (%)	51.3	51.4	58.9	63.8	69.4

Source: Equitymaster

From FY20-24 TCS's revenue and net profit has compounded at a compound annual growth rate (CAGR) of 10.5% and 7.9% respectively.

It has been delivering strong returns, with the RoE and RoCE averaging at a healthy 43.4% and 58.9%, respectively.

Going forward, the company plans to collaborate with other organisations to build early prototypes and proofs of technology (PoT) to validate the promise of quantum computing in their business.

Apart from this, the company is set to intensify its focus and investments in automotive labs and advanced AI, technologies including generative AI, to bolster its engineering, research and development (ER&D) capabilities.

The management expects FY25 to be better in terms of revenue and profitability.

For more details, see the TCS company fact sheet and quarterly results.

#2 Wipro

Next on the list is Wipro.

Wipro is one of the leading IT services companies in India.

The company's IT services are organised into two segments, (i) consulting and data engineering, and (Ii) cloud, digital operations, and cyber security.

It also offers IT products to complement its IT services business to all major industries, including government, defence, manufacturing, and telecom.

Wipro is making strides in the quantum computing space through its comprehensive research and development efforts.

Wipro's Lab45, its innovation hub, launched a Think Tank for Change Leaders on 29 April 2024. This initiative is designed to support leaders who are in positions of influence across enterprises, government, and academia.

The Think Tank by Lab45 focuses on the impact of emerging and exploratory technologies like GenAI, Space Tech, Spatial and Quantum Computing, IoT, and more, on business, people, and the planet.

Wipro's quantum initiatives aim to explore how quantum technology can address key challenges faced by industries.

In 2021, Wipro signed a Memorandum of Understanding (MoU) with Tel Aviv University (TAU) in Israel to explore quantum computing applications. This collaboration was aimed to analyse use cases and identify potential quantum computing solutions tailored for Wipro's largest clients.

In FY24, its revenue from operations also saw a 4.2% YoY decrease, falling from Rs 231.9 bn to Rs 222.1 bn.

Its net profit dropped from Rs 30.9 bn in the same period last year to Rs 28.8 bn in Q4 FY24.

Wipro's Financial Snapshot (FY20-24)

(Rs m, Consolidated)	FY20	FY21	FY22	FY23	FY24
Revenue Growth (%)	3.6	1.3	28.1	14.1	(-0.8)
Operating Profit Margin (%)	0.2	0.3	0.2	0.2	0.2
Net Profit Margin (%)	16	17.5	15.4	12.6	12.4
Return on Equity (%)	17.7	19.9	18.9	14.7	15
Return on Capital Employed (%)	23.3	26	22.2	19	19.9

Source: Equitymaster

Wipro's revenue grew at a CAGR of 8.8% from FY20 to FY24, while net profit grew at 4.3%.

Despite this, the company maintained strong financial health, with an average RoE of 17.3% and RoCE of 22.1%.

Going forward Wipro plans to increase its focus on quantum computing.

Further, it plans to invest heavily in digital transformation initiatives and is leveraging cloud computing, artificial intelligence, and data analytics to offer creative solutions for its clients.

It is also exploring the potential of AI to drive growth and efficiency in its business. With the growth of cyber threats, the company is also focusing on strengthening its cyber security solutions.

For more details, see the Wipro company fact sheet and quarterly results.

#3 HCL Tech

Next on the list is HCL Tech.

HCL Tech recognized for its strong presence in software development, digital transformation, and cloud services, is actively engaged in quantum computing through various initiatives.

Its Quantum Labs, part of the Azure Quantum Network, focuses on creating cloud-based examples of quantum technologies for clients while showcasing proof-of-concept business use cases.

Additionally, the company runs the Quantum Inspire series, a set of webinars that delve into core quantum technologies and their applications across different industry verticals, providing stakeholders with valuable insights.

To further advance knowledge in the field, HCL Tech has established the eSTiPTM Academy, which offers training programs in quantum technology.

HCLTech is exploring quantum computing opportunities with enterprise organizations globally by leveraging the latest Microsoft Azure Quantum toolsets and support.

HCLTech aims to inspire and educate its clients to explore and scale customer-ready deployments of quantum applications.

Believing that quantum technologies are a strategic imperative, HCL Tech advocates for their integration into existing security frameworks.

The company promotes quantum-safe cryptography and quantum key distribution (QKD) as effective solutions for ensuring data integrity and secure communications in a rapidly evolving technological landscape.

For FY24, its revenue rose 8.3% to Rs 1,099.1 bn, while the net profit climbed 6% to Rs 157 bn.

HCL Tech's Financial Snapshot (FY20-24)

(Rs m, Consolidated)	FY20	FY21	FY22	FY23	FY24
Revenue Growth (%)	18.5	16.2	7.1	13.6	18.6
Operating Profit Margin (%)	24.6	25.3	27.8	25.2	23.6
Net Profit Margin (%)	16.8	15.6	14.8	15.8	14.6
Return on Equity (%)	26	23.9	20.1	22.2	23.4
Return on Capital Employed (%)	31	28.4	27.2	26.6	29.7

Source: Equitymaster

The revenue and net profit have grown at a 5-year CAGR of 14.7% and 11.2%, respectively. This robust growth has led to a strong RoCE and RoE averaging 28.6% and 23.1% over the last 5 years.

Going forward, HCL Tech is expected to gradually increase its share of the total IT pie, largely through its rapidly growing infrastructure management practice and robust order book.

HCL Tech has been aggressively pursuing large deals over the past few quarters.

For more details, see the HCL Tech company fact sheet and quarterly results.

#4 Infosys

Next on the list is Infosys.

Known for providing consulting, technology, outsourcing, and next-generation digital services that enable clients to execute their digital transformation strategies.

Rated among the best in the industry, Infosys derives 57% of its revenues from digital services, with the remaining 43% coming from traditional services.

Taking a significant leap forward in quantum computing, Infosys has launched the Infosys Quantum Living Labs, aimed at clients across various industries who wish to explore the "art of the possible" through quantum computing.

The company is actively fostering awareness about quantum computing and its relevance across different sectors. The Infosys Quantum Living Labs (QLL) delves into the limitless possibilities and transformative potential of quantum technology for clients' businesses.

Through the Early Access Program, clients can become quantum-ready to address business challenges with guidance from experts, assistance with proof-of-concept implementation, exploration of potential use cases, and access to quantum infrastructure and innovations from partner ecosystems.

For FY24, its revenue grew 4.7% to Rs 1,536.7 bn, while the net profit rose 8.9% to Rs 262.3 bn.

Infosys' Financial Snapshot (FY20-24)

(Rs m, Consolidated)	FY20	FY21	FY22	FY23	FY24
Revenue Growth (%)	9.8	10.7	21.1	20.7	4.7
Operating Profit Margin (%)	0.3	0.3	0.3	0.3	0.3
Net Profit Margin (%)	18.3	19.3	18.2	16.4	17.1
Return on Equity (%)	25.5	25.6	29.6	32.3	30.1
Return on Capital Employed (%)	34	35.3	40.6	45.1	41.8

Source: Equitymaster

Between FY20 and FY24, Infosys' revenue and net profit have surged with an impressive CAGR of 13.2% and 11.2%, respectively.

The company has shown consistent financial strength, boasting an average RoE of 28.6% and RoCE of 39.4%.

Looking ahead, Infosys plans to further enhance its presence in the quantum computing space.

For FY25 the company has guided for 1-3% revenue growth in constant currency terms.

The company expects growth to accelerate in financial services and telecom verticals due to large deal wins. Infosys also has a positive outlook on the European markets.

For more details, see the Infosys company fact sheet and quarterly results.

#5 Tech Mahindra

Last on the list is Tech Mahindra.

Tech Mahindra is an IT services company offering a wide range of services, including infrastructure, cloud, engineering, application, data analytics, and network and testing services.

The company has a client base spread across various industries, including communications, manufacturing, banking, finance, insurance, technology, and media and entertainment.

Accelerating the adoption and commercialization of quantum technologies, Tech Mahindra has signed a memorandum of understanding (MoU) with Mahindra University to boost research and development (R&D) in quantum computing.

Tech Mahindra has also inked a partnership with Finland-based IQM Quantum Computers in setting up a quantum centre of excellence - QNxt in Helsinki.

This will allow both companies to deliver new quantum computing offerings for healthcare, banking, cyber security, and other various industries.

The partnership will bring together IQM's quantum algorithm development capabilities, and hardware with Tech Mahindra's industry knowledge in quantum computing - hybrid algorithms, quantum machine learning, and quantum simulation.

For FY24 Tech Mahindra reported a 2.4% YoY fall in revenue to Rs 519.9 bn. The net profit too dropped by 51.2% to Rs 23.6 bn.

Tech Mahindra's Financial Snapshot (FY20-24)

(Rs m, Consolidated)	FY20	FY21	FY22	FY23	FY24
Revenue Growth (%)	6.1	2.7	17.9	19.4	(-2.4)
Operating Profit Margin (%)	0.2	0.2	0.2	0.2	0.1
Net Profit Margin (%)	10.6	11.5	12.6	9.1	4.6
Return on Equity (%)	18.2	17.8	21.3	17.6	9.1
Return on Capital Employed (%)	24.3	24.9	28.6	24.5	13.7

Source: Equitymaster

Tech Mahindra's revenue grew at a CAGR of 8.4% from FY20 to FY24, while net profit saw a decline of 11%.

Despite this, the company maintained strong financial health, with an average RoE of 16.8% and RoCE of 23.2%.

Going forward, the company intends to expand its collaborations with additional firms to further develop its capabilities in the quantum computing space.

Being part of the Mahindra Group, Tech Mahindra has outlined clear focus areas for accelerating growth and driving innovation.

It is heavily investing in AI and automation to improve efficiency and generate new revenue streams.

The company is also expanding its footprint in key industries like banking, financial services, insurance, and healthcare.

For more details, see the Tech Mahindra company fact sheet and quarterly results.

Conclusion

After nearly four years of delay, India's National Quantum Mission is finally set to launch with a range of ambitious initiatives.

These include the establishment of a grant program offering Rs 100-500 m in funding for startups, the introduction of India's first quantum computer capable of achieving 6-qubit computation in the coming months, and the creation of four Section 8 companies to spearhead various mission activities.

These companies will operate under the leadership of prestigious institutions like the Indian Institute of Technology (IIT) and the Indian Institute of Science (IISc).

Further, the government is looking to work with Information Technology (IT) services majors like Tata Consultancy Services, HCL, and Tech Mahindra to develop software for quantum technologies under a Rs 60 bn scheme, which will support Indian startups and scientists working in the emerging area.

Recent data highlights a surge in investments in quantum computing, as both governments and corporations around the world intensify research and development efforts.

The global quantum computing market is projected to grow from US$ 1.3 billion (bn) in 2024 to US$ 5.3 bn by 2029. With a strong focus on cutting-edge research, innovative startups, and fostering collaboration, quantum computing stocks are set to benefit.

Nevertheless, it is always prudent to conduct thorough research before making any investment decisions. Ensure investment aligns with your financial objectives and matches your risk tolerance level.

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...