Artificial Intelligence (AI) is already changing the way India’s internet companies operate. From recommending products to improving customer support and reducing costs, AI has somehow became part and parcel of everyday business
According to the latest report by the brokerage house Bank of America (BofA), these AI-led benefits are already largely baked into market expectations. In the listed equity market space, the report highlighted that Meesho and Eternal are the two internet companies that could deliver positive surprises as AI adoption deepens over the next 12 to 18 months.
The easy AI gains are already priced in
According to the BofA report, most listed business-to-consumer (B2C) internet companies are already using AI to improve product discovery. These include personalised recommendations, automate customer support, optimise logistics and increase software development efficiency.
The report noted, “Listed India internet platforms are using AI to personalise, automate customer support, optimise operations & improve developer productivity.”
The brokerage report added that these AI-led improvements are “largely baked in market expectations.”
Why Meesho and Eternal stand out
The brokerage house report further pointed out that Meesho and Eternal have stronger opportunities than peers because AI could help them generate entirely new growth drivers rather than simply reduce costs.
For Meesho, the biggest opportunity comes from Vaani, its voice-based AI shopping assistant. As per BofA report, the platform could help users in Tier 3, Tier 4 and Tier 5 markets who are more comfortable speaking than typing.
“We find Meesho & Eternal best placed to positively surprise on AI,” added BofA in its report.
Eternal, on the other hand, could benefit from AI-driven advertising. According to the brokerage report, the company has access to premium users and several direct-to-consumer (D2C) and fast-moving consumer goods (FMCG) brands.
AI may create new revenue streams
The brokerage report believes AI’s biggest long-term value may come from helping internet companies earn money in new ways instead of only improving efficiency.
“Platforms could leverage AI to expand Total Addressable Market by targeting multi-lingual users or focus on white spaces,” the BofA report added.
According to BofA, AI can also increase advertising income by improving customer targeting and expanding monetisable inventory. Over time, companies with large ecosystems could even build AI-based software services or Application Programming Interface (API) products on top of their existing businesses.
New businesses: Key challenges
BofA also highlights several challenges.
The report further noted, “Higher token costs may not be offset by commensurate increase in revenues in a low Average Revenue Per User, high usage market like India.”
The brokerage report also warns that AI agents could lower barriers for new competitors.
“Agentic AI could increase competition for incumbents by allowing new business models to emerge,” BofA noted.
According to BofA, smaller companies may partner with Large Language Models (LLMs) such as ChatGPT to reach customers more efficiently, increasing competitive pressure on established platforms.
India’s AI journey is still evolving
The brokerage report believes widespread adoption of fully autonomous AI agents may take time in India.
BofA added, “We believe it is a bit too early to conclude that agentic AI will pick-up particularly for difficult/complex tasks in India.”
According to BofA, Indian consumers continue to prefer specialised apps over super apps. These behavioural patterns could slow the adoption of fully AI-driven shopping experiences.
Disclaimer: Investment in the equity markets involves significant risks, and the analysis of brokerage reports or the mention of specific internet companies does not constitute a direct recommendation to buy, sell, or hold any security. Readers should consult a SEBI-registered financial advisor before making any investment decisions based on market projections or potential growth drivers. This disclaimer has been generated using AI to support user well-being and responsible content consumption.
