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)
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