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Every few years, a sector comes into focus and goes from nice to becoming a non-negotiable.
Cybersecurity hit that inflection point a while ago, during the pandemic, but the surprising thing is, it’s not going back any time soon.
In 2024 alone, we saw headline-grabbing incidents that rattled entire industries, from the CrowdStrike outage that disrupted airlines, hospitals, and businesses globally, causing estimated losses of over US$5 billion, to relentless ransomware campaigns targeting healthcare and government infrastructure.
If anything, those events didn't slow down the investment in the sector, but they accelerated it.
The numbers clearly back that up. Global cybersecurity spending is projected to hit $248 billion in 2026, a 12.5% jump, even as broader tech stocks face a rough ride this year.
On top of this, worries around AI deepfakes continue to surge, following a 250% rise between 2024 and 2025. Meanwhile, as AI agents are expected to handle up to 40% of enterprise tasks, the number of attack surfaces is growing rapidly.
So, if you're an investor looking to build a watchlist in the cybersecurity sector with genuine long-term tailwinds, cybersecurity deserves a serious look.
Keeping that in mind, here are four names worth keeping on your radar.
Please note, we’ve filtered these stocks using Equitymaster’s powerful stock screener: Best cybersecurity stocks in India.
The company provides software solutions to the electronic payment industry. It deals in software development, maintenance, testing, and software project management under client-server and web-based technologies.
Its major infrastructure is located in Kolkata, while overall, it operates in US and India.
After discontinuance of its contract with Visa Inc., R.S. Software has shifted its focus from service to product and platform development, digital payments, and in-country networks.
Coming to its financials, R.S. Software’s sales have grown at a compounded annual growth rate (CAGR) of 28% in the past 3 years.
During the same time, it has turned from a loss-making company to a profitable one.
Its 3-year average return on equity (ROE) and return on capital employed (ROCE) stand at 18% and 9%, respectively.
In its recent earnings call, the management acknowledged that the current fiscal year has not been good because some of their projects got delayed in closing, specifically large, country-level payments modernization implementations, where decisions are governed by the government and the Reserve Bank of India.
Despite this, the management reiterated confidence and said that payments modernization continues to be on a positive path, and the company is very well positioned for this opportunity.
The integration of UPI in 10 countries has been done by R.S. Software, and it is further gaining revenue from the launch by NPCI of UPI-integrated cross-border transactions.
Second on the list is Expleo Solutions.
The company primarily offers software services such as innovation management, transformation consultancy, digital transformation, and quality and testing to banking, financial services, insurance, aerospace, automotive, and healthcare industries.
It also provides cybersecurity testing and builds and implements cybersecurity strategies and assets to secure critical infrastructure, complex systems, and assembly lines for its clients in India, Europe, Asia-Pacific, the Middle East, and North Africa.
In 2021, it partnered with TEHTRIS, a well-known French enterprise specialising in cybersecurity services.
Coming to Expleo’s financials, the company’s sales and net profit have grown at a CAGR of 31% and 21%, respectively, over the past 5 years.
Its return on equity and return on capital employed have averaged 20% and 28% over the same period.
Going forward, the company's strategy for the coming year is in four major areas: growing existing accounts, focusing on selected geographies like US and Middle East, pushing its digital and AI services as a differentiator, and working lean towards more operational benefits coming from reduced costs.
The management sees a good outlook ahead in industries like banking, insurance, retail, with QSR and defence also looking promising.
Third on the list is Sasken Technologies.
Sasken is based in Bengaluru, and the company offers product engineering and digital transformation services to global customers.
Some of the industries it serves are semiconductors, automotive, consumer electronics, industrials, and telecommunications.
In the age of rapid digitisation, there is a high need to manage enormous amounts of data against cyber-attacks, and it’s exactly for this reason that Sasken forayed into the cybersecurity space.
It offers security management services for consumer electronics, especially Android devices.
This addresses over 6,000+ common vulnerabilities and exposures on over 90 consumer electronics and enterprise device customer models.
Sasken also has a secure cyber mesh that it deploys to protect business operations on distributed cloud and computing platforms across all stages of the network, right from the data source to the application layer.
Apart from cybersecurity, the company focuses on implementing future technologies such as 5G, artificial intelligence, machine learning, the internet of things (IoT), and blockchain.
Coming to its financials, the company’s sales have grown at a CAGR of 8% over the past 3 years, while profit growth has come down.
The average 3-year return on equity and return on capital employed stand at 14% and 18%, respectively.
Going forward, Sasken is expected to leverage its established strengths in the product engineering and digital transformation space.
It plans to leverage deep expertise in semiconductor and telecommunication technologies.
It will also benefit from the already in-house developed global delivery model with facilities in India, Finland, Germany, and Japan, serving over 100 Fortune 500 clients.
Last on the list is Quick Heal Technologies.
Quick Heal is a name synonymous with anti-virus software. Established in 1995, it has evolved into a 360-degree cybersecurity solutions provider in India.
With its flagship products, such as Quick Heal and Seqrite, it has a dominant market share in India and a global presence in over 50 countries.
The company offers a range of services across data encryption, data loss prevention, endpoint security, network security, enterprise mobility management, and server protection.
In the past 5 years, as the number of cyber attacks has gone through the roof, Quick Heal was quick enough to act upon it and introduce multiple new products.
The company is already well-positioned in the IT market with its anti-virus products. Banking upon its good reputation, it plans to expand its product offerings in cybersecurity further.
Coming to its financials, Quick Heal’s sales and net profit both have had a downward trajectory.
While the decline in sales is marginal over the past 5 years, its profit has dropped from ₹1 billion to ₹50 million as of FY25.
The company’s ROE and ROCE have averaged 7% and 9%, respectively, over the past 5 years.
Going forward, Quick Heal aims to grow its market size from ₹1,800 crore in FY24 to ₹4,000 crore by FY27, through organic growth and targeting new customer segments.
Breaches, nation-state attacks, AI-powered threats, and tighter regulations aren't hypothetical risks anymore, and enterprises know it.
No wonder companies are deploying more funds into this niche segment.
As a starter, you can keep the above names on your watchlist and do your own digging on earnings, competitive moats, and how each company is navigating its platform consolidation.
That being said, investors should evaluate the company's fundamentals, corporate governance, and valuations of the stock as key factors when conducting due diligence before making investment decisions.
Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such.
This article is syndicated from Equitymaster.com