India’s artificial intelligence opportunity may be far broader than commonly perceived, with investment potential extending well beyond software exporters and global tech giants, according to Hiren Ved of Alchemy Capital Management.
Making a strong case for a relook at the domestic AI theme, Ved said, India does not lack an AI story, investors are just not looking hard enough. His remarks challenge the dominant narrative that meaningful AI exposure is largely limited to global technology leaders or a handful of Indian IT firms. Instead, Ved pointed to a less obvious but rapidly growing layer of the AI ecosystem, infrastructure.
“Currently in AI, most of the spending is happening at the infrastructure level. So people are setting up data centers,” he said, explaining that the real opportunity lies in identifying companies that benefit from this capital expenditure cycle.
To capture this theme, Alchemy Capital created a custom benchmark. “I told my team to build a custom India AI index… these are all physical stuff like power equipment, cooling equipment, cables, everything that goes into building a data center,” Ved said.
The result was an equal-weighted 12-stock India AI index, designed to map companies linked to the build-out of digital infrastructure rather than software-led AI services. According to Ved, the performance of this basket has been striking.
“In three years, in dollar terms, it has delivered a 52 per cent compounding return versus Mag 7 plus Nvidia, which has delivered a 24 per cent compounded return,” he noted, highlighting how domestic plays have outperformed some of the most celebrated global AI stocks.
For Ved, the takeaway is clear: investors need to rethink how they approach emerging themes. “If you look hard enough, if you are creative, there is always a way to play a trend…” he said.
He also emphasised the importance of questioning consensus narratives in financial markets. “Narratives are narratives, and the more the narratives are there, the more there is an opportunity to make money, because you can find an anti-narrative, you can find the reality which the narrative does not represent,” Ved explained.
The index itself includes a mix of large-cap companies that are indirectly linked to AI growth through infrastructure supply chains. “They are essentially all beneficiaries of the AI capex… fairly large-cap stocks,” he said. Among the names he cited were companies such as “Hitachi, GE, ABB, Siemens Energy, Apar, Polycab, Blue Star… all these companies supply into AI.” These firms, he noted, are involved in providing critical components and systems required for building and running data centres, from electrical equipment and cabling to cooling technologies.
The broader implication is that India’s AI opportunity is not limited to coding or algorithm development but extends into industrial manufacturing and engineering segments that support the digital economy’s backbone.
(Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money related decisions.)
