India’s stock market weakness is masking one of the country’s strongest pockets of AI exposure. While the Nifty has declined 12% in 2026, a Goldman Sachs-screened basket of 42 Indian “AI Enablers” has surged about 60%, making it the best performing segment of the market by a wide margin.

The divergence challenges the dominant view that India has little to gain from the global artificial intelligence boom. The country has increasingly become the default “anti-AI” trade among major markets because its benchmark indexes have limited exposure to AI-related companies. But beneath the headline index performance, a cluster of companies tied to power, data centres and semiconductors is benefiting from the infrastructure build out required to support AI.

Goldman Sachs screened about 1,800 companies listed on Indian exchanges, representing a combined market value of around $5 trillion. After applying filters based on market size, liquidity, revenue growth, capex, research and development intensity, and management commentary on AI infrastructure, the investment bank identified 42 companies with a combined listed market value of $670 billion.

The companies were selected based on visible revenue generation, order book pipelines, capital commitments and partnerships across the AI-related supply chain. The basket includes businesses involved in power generation, power transmission, power equipment, data centre development and operations, data centre hardware, semiconductor assembly and testing, semiconductor materials and semiconductor hardware.

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42 Indian AI Enablers stocks
The list includes Adani Green Energy, Tata Power, NTPC Green Energy, ACME Solar, Clean Max Enviro Energy, Power Grid, Adani Energy Solutions, KEC International, ABB India, Cummins India, Siemens, Hitachi Energy India, GE Vernova T&D India, APAR Industries, Kirloskar Oil Engines, Schneider Electric Infrastructure, TD Power Systems, MTAR Technologies, Diamond Power Infrastructure, Waaree Renewable Technologies, Gujarat Fluorochemicals, Navin Fluorine, Himadri Speciality Chemical, Netweb Technologies, CG Power, Waaree Energies, Sansera Engineering, Kaynes Technology, Paras Defence, Polycab India, KEI Industries, Sterlite Technologies, HFCL, Blue Star, Craftsman Automation, Syrma SGS Technology, Reliance Industries, Bharti Airtel, Larsen & Toubro, Adani Enterprises, Anant Raj and Brigade Enterprises. The basket has rallied about 60% in 2026.The rally has been broad-based. All three major layers of power, data centres and semiconductors have gained between 40% and 80% in 2026, according to Goldman Sachs. Six of the nine sub-layers have risen more than 20%, while all nine have outperformed the MSCI India Index.

The next best performing pocket of the Indian market, healthcare, has gained only about 10% this year. The AI-enabler basket has also outperformed the Nifty Midcap and Smallcap indexes, suggesting that its gains cannot be explained only by a broader rally in smaller companies.

The composition of the basket highlights how much of India’s AI exposure sits outside traditional benchmark heavyweights. Of the 42 companies, 8 are microcaps, 13 are smallcaps, 9 are midcaps and only 12 are largecaps. Capital goods account for half the basket, with 21 companies, while utilities and technology hardware are the other major areas of exposure.

Data centre operators account for the largest share of the basket’s total market value, at about $400 billion. They are followed by power equipment companies at $100 billion, power generation at $50 billion and power transmission at $45 billion.

Goldman Sachs said the rally has been driven primarily by earnings rather than speculative multiple expansion. Since 2025, the AI-enabler basket has returned 53%, with earnings growth contributing 65 percentage points while valuation compression reduced returns by 12 percentage points.

That earnings momentum is expected to continue. Consensus estimates cited by Goldman Sachs indicate that earnings for the AI-enabler basket could grow 53% in 2026, 39% in 2027 and 29% in 2028. This compares with expected 2027 earnings growth of 16% for MSCI India and 23% for the MSCI India Small and Midcap Index.

Power generation, data centre hardware and power equipment are expected to lead the next phase, with earnings growth of about 40% to 60%. Collectively, the AI-enabler group could contribute around two percentage points to Nifty 500 profit growth in 2027 and 2028, the report said.

The earnings outlook is being supported by a strong investment cycle. Nifty 500 capex growth is expected to more than double to 16% in 2026 from 7% in 2025, with AI enablers contributing about six percentage points to that increase. Goldman Sachs expects the companies to remain free cash flow positive despite higher capital spending.

The AI theme is also appearing more frequently in corporate disclosures. Goldman Sachs found that references to AI in management commentary have risen sharply over the past two years, not only among technology companies but also across other sectors. Earnings calls increasingly include terms such as data centres, power purchase agreements, fibre infrastructure, transformers, switchgear, uptime, substations, GPUs, OSAT and data lakes.

That shift in corporate language is providing an early indicator of investment and capacity expansion, even though hard disclosures on AI-related revenue and spending remain limited.

The opportunity, however, comes with a valuation caveat. The AI-enabler basket trades at about 36 times forward earnings, an 85% premium to the MSCI India Index and near the upper end of its five-year historical range. On an absolute basis, Goldman Sachs said the multiples appear elevated.

But the premium narrows when valuations are adjusted for earnings growth. The basket’s PEG ratio, the price-to-earnings multiple relative to expected growth, is 1.3 times, slightly below MSCI India’s 1.4 times. That suggests the premium may reflect stronger expected earnings rather than excessive valuation alone.

There is also a significant divergence within the group. While some sub-layers trade at demanding valuations, others remain closer to their historical averages. Goldman Sachs cautioned that the screen can include false positives because of its top-down methodology, while its liquidity and market cap filters may also exclude some potential beneficiaries.

(Disclaimer: This article has been written by Nikhil Agarwal, who is not a SEBI-registered Research Analyst or an Investment Adviser. Nikhil Agarwal and his/her ‘relative(s)’ (as defined under Section 2(77) of the Companies Act, 2013) do not hold any financial interest in the companies mentioned in this article as of the date of publication. The views/recommendations mentioned in this article, wherever applicable, are those of the respective SEBI-registered Research Analyst/brokerage and have been reproduced/reported with due attribution. They should not be construed as the views or recommendations of The Economic Times Digital or the journalist. Readers are advised to consider the original research report and make their investment decisions based on their own assessment. Brokerage disclaimershere)

Sebi Chairman Tuhin Kanta Pandey on Thursday said regulatory measures in the equity derivatives market have helped reduce aggregate F&O losses, but individual traders continue to incur losses even after staying in the segment for several years.

A latest Sebi study showed that losses in futures and options have declined from Rs 1.12 lakh crore to around Rs 90,000 crore after the regulator’s interventions. However, Pandey said many traders continue to lose money even after three to four years of participation, making it important for investors to assess whether derivatives trading is suitable for them.

The market regulator will continue to monitor derivatives trading, he said.

The comments come against the backdrop of Sebi’s latest study on individual traders in the equity derivatives segment for FY26. The study, released in August, showed that individual traders’ aggregate net losses fell to about Rs 91,685 crore in FY26 from about Rs 1.12 lakh crore in FY25. However, 88% of individual traders still incurred losses during the year.

Participation had cooled after Sebi tightened derivatives rules. Individual traders in equity derivatives fell about 20% in FY26. The pace of exits also increased, with 46 lakh traders who had participated in FY25 not returning in FY26. This compared with 26 lakh exits in the previous year.

Retail losses remain high
Sebi findings suggest that while overall losses have reduced, the odds remain poor for individual traders. Nearly nine out of ten individual traders continued to lose money in FY26. The reduction in aggregate losses was partly because fewer traders participated in the segment after the regulator introduced measures to cool excessive speculation.
Sebi had earlier introduced steps such as higher contract sizes for index derivatives, fewer weekly index expiries and upfront collection of option premiums. These measures were aimed at reducing speculative retail activity and improving investor protection.
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The study also showed a sharp divide between individual traders and larger market participants.

Proprietary traders recorded the highest gross trading profit at about Rs 44,000 crore in FY26, followed by foreign portfolio investors at about Rs 14,000 crore. Sebi said 99% of profits made by foreign portfolio investors and proprietary traders came from algorithmic trading entities.

This reinforces the concern that individual traders are competing in a market where larger, faster and better-capitalised participants have a structural advantage.

Disclaimer: The views/recommendations mentioned in this article, wherever applicable, are those of the respective SEBI-registered Research Analyst/brokerage and have been reproduced/reported with due attribution. They should not be construed as the views or recommendations of The Economic Times Digital or the journalist. Readers are advised to consider the original research report and make their investment decisions based on their own assessment. Brokerage disclaimers here

Always a Warrior

Hugo Boss said it appointed Michael Murray, Frasers Group’s FRAS 2.16%increase; up pointing triangle chief executive, as the next chairman of its supervisory board, weeks after the U.K. retailer achieved a near-majority ownership.

Murray, who has sat on Hugo Boss’s supervisory board since May 2025, will succeed Stephan Sturm as chairman, the German premium apparel company said Wednesday.

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Enterprise Minister Adam Price said the panel will produce an interim report early net year

Members of an advisory panel that will support the Welsh Government to establish a new development agency for Wales has been revealed.

Following the appointment of Jonathan Lewis, the current chair of the UK’s biggest ports operator ABP and a former chief executive of Capita, as panel chair, Cabinet Minister for Enterprise, Connectivity and Energy, Adam Price, has confirmed the other members.

The panel of ten, who will not be remunerated, include economist and managing partner of Cadwyn Capital Gerry Holtham, former managing director of Nantgarw-based GE Aviation, La-Chun Lindsay, and as its vice chair, founding member of Starling Bank and chair of Fintech Wales Sarah Williams-Gardener.

Creating a new agency at arm’s length of the Welsh Government was a key Senedd Election manifesto pledge of Plaid Cymru. Rather then focusing on taking over responsibility for current Welsh Government business support functions, such as Business Wales, a small agile agency – sourcing necessary external private expertise – could potentially emerge.

This would be a body operating as more as a facilitator to support Welsh firms seeking to expand at scale or bring investment projects into Wales – supported by the Welsh Government, local authorities, and regional bodies in creating a lighter touch approach to planning and, where devolved, business regulation.

The agency will form’s part of the Welsh Government efforts to halve Wales’s productivity gap with the UK average by half within the next decade.

The former at arm’s length of government Welsh Development Agency was abolished by the then Labour Welsh Government of Rhodri Morgan in 2006. Its functions, and many of its staff, were brought into the Welsh Government’s civil service.

However, at the time of its demise it had become bloated, with more than 1,000 staff. Its ability to attract inward investment projects into Wales at scale was also on the wane with increasing competition from the successor states of eastern Europe.

In written statement Mr Price said: “Over the past two months, we have spent time targeting and securing the support of a talented team of business experts, all bringing their individual diverse experiences, but all with a shared passion and willingness to support Wales to do business, to advise us on the design of the new development agency.

“Each will bring their own expertise to assist us in developing the detailed remit and functions of the agency, helping us design and establish an organisation that swiftly supports the growth of our nation’s economy and becomes a key driver for our national productivity mission; to halve Wales’s productivity gap with the UK within 10 years. Improving productivity will have a direct consequence of creating better jobs for people, thereby putting more money in their pockets and raising living standards.

“We have set out the headline vision. The panel will help us deliver that vision, providing advice, recommendations and challenge about the form and functions of the agency.”

Mr Price said the panel “not operate in isolation” but will engage widely and be outward looking and collaborative in taking forward their work. He added: “In conjunction with the panel, we are developing a programme of stakeholder engagement to ensure the input of a wide range of voices across the Welsh economic development landscape.”

The panel is expected to publish and interim report early next year.

The other panel members are: former chief executive of Subsea7, John Evans; Beren Kayali, co-founder and chief technology officer of Deploy Tech; Alison Lea-Wilson, co-founder of Halen Môn; Nigel Morris, founder of Capital One and managing Partner of QED Investors , Gareth Noyes , who held a range of senior roles at Wind River Systems; Oriel Petry, senior vice president and head of public affairs at Airbus UK and general secretary of TUC Wales, Laura Doel .

Responding to anointment chair of FSB Wales, John Hurst, said: “We welcome the appointment of the panel that will advise the Welsh Government on establishing a new development agency, and particularly the inclusion of SME owners who can bring first-hand experience of starting and growing a business to this important work.

“This is a significant opportunity to implement a simpler, more joined-up and more effective approach to economic development in Wales.

“The new agency must deliver measurable impact by making it easier for firms to access the practical help they need to survive and grow, with the agency’s success judged by clear outcomes: more small businesses starting, surviving and scaling.

“Small businesses are embedded in every community and are fundamental to Wales’s economic success. As the panel begins its work, it must ensure that the voices of small businesses shape its recommendations from the outset, so that the new agency is designed around the real needs and ambitions of firms across Wales.”

Latest figures from the ONS show that output per head in Wales is around 85% of the UK level. The productivity target is seen by the administration as achievable, given that some of the key levers needed to improve output, such as skills and education, are devolved However, it will still be a challenge as other nations and regions of the UK will also be seeking to improve their respective productivity rates, with AI a key driver