Top 3 AI Stocks Bought by FIIs in March 2026 Quarter

Foreign Institutional Investors (FIIs) are back in action, having developed renewed interest in India's AI-related stocks during Q4FY26 (March). The reason is that many companies are experiencing growth both due to improved foreign ownership and better business performance in the field of AI services.

Here are 3 stocks in the AI space where FIIs raised their stakes during Q4 FY26.

1. Tech Mahindra

Tech Mahindra, a leading IT services and consulting company from the Mahindra Group, is actively positioning itself as an AI-led digital transformation player. The company operates in over 90+ countries and serves sectors including banking, healthcare, telecom, manufacturing, and communications, offering services across AI, cloud computing, cybersecurity, and digital engineering.

FII holdings in Tech Mahindra showed a volatile but improving trend. Foreign investors reduced their stake from 20.6% in Sept 2025 to 17.9% in Dec 2025. However, sentiment improved in March 2026, with holdings rising to 18.5%, indicating selective return of FIIs.

On the AI front, Tech Mahindra is embedding AI across its service offerings and strengthening its enterprise transformation capabilities. Management highlighted increased large client engagements in data and AI-led projects, reflecting stronger adoption trends.

FY26 performance also supported investor confidence. Revenues stood at US$ 6,385 m, up 1.9% and 0.6% on CC basis. Operating profit reached US$ 797 m, rising 31.4% YoY, while operating margins expanded from 9.7% to 12.6%, a gain of 290 basis points.

Client momentum was also strong, with US$ 50 m+ clients increasing by 4 YoY to 29, and US$ 20 m+ clients rising by 7 YoY to 66.

2. Tata Elxsi

Tata Elxsi is a globally recognized design and technology solutions firm offering services for industries including automotive, healthcare, broadcasting, communication, and transport. Design thinking coupled with technology is used at Tata Elxsi, leveraging Internet of Things (IoT), cloud, mobility, virtual reality (VR), and artificial intelligence.

The FII shareholding in Tata Elxsi showed sharp correction but subsequently recovered. Ownership of foreign investors fell sharply from 12.5% in September 2025 to 8.5% in December 2025, and improved to 11.0% in March 2026. This shows investor sentiment has been recovering.

Tata Elxsi is becoming more AI-led in its engineering capabilities. For FY26, the firm made substantial advancements in its GenAI abilities. The management mentioned investments in partnership with AI firms, creation of automotive SDLC platform, DevStudio.ai, creation of stacks, AI infrastructure, IP protected sandboxing, and large scale upskilling.

All these efforts have been undertaken to make Tata Elxsi an AI native engineering firm.

It shows that Tata Elxsi is looking to leverage technology to make itself an AI-led firm.

3. LTM (LTIMindtree)

LTM, previously referred to as LTIMindtree, is one of the prominent players within India’s IT Services and Digital Transformation space, backed by Larsen & Toubro. After reaching the merger integration maturity phase, the organization underwent a name change in 2026 and further expanded its AI-led service offerings in Cloud Computing, Cybersecurity, Analytics, and Enterprise Applications.

The FII ownership of LTM displayed a consistent upward trend, rising from 6.4% in Sept 2025 to 6.5% in Dec 2025 and subsequently to 6.6% in March 2026, indicating a gradual enhancement in foreign investor trust.

The organization is actively investing in AI capabilities using its BlueVerse agentic AI ecosystem to help its customers experience a faster concept-to-value journey and enhance AI-focused delivery models.

LTM achieved impressive deal momentum with Q4 FY26 order inflows of US$ 1.7 bn, representing its sixth consecutive quarter exceeding US$ 1.5 bn. Additionally, the company won numerous large AI-led deals, such as transformation initiatives involving global financial institutions and enterprise software vendors.

They involved the AI-enabled reinvention of business processes, platform enablement, and enterprise digitalization.

LTM's approach continued to be centered around productivity enhancements powered by AI, preparing for future talent, and reimagining delivery models to ensure scalability in the long run.

Conclusion

The Q1 FY2026 quarter displays an evident trend of selective FII buildup in Indian information technology and engineering firms with sound AI positioning. The positive sentiment of foreign investors toward Tech Mahindra, Tata Elxsi, and LTM can be attributed to the increased application of AI technology and digital transformation initiatives.

It is expected that with the emergence of AI-driven enterprise expenditures, the Indian technology firms will continue benefiting from a structural demand perspective.