Manufacturing exports, earnings revival and AI: Why Mukul Kochhar sees Indian market staying resilient

India’s equity markets are maintaining resilience driven by strong fourth-quarter earnings and a structural opportunity in manufacturing exports, according to Mukul Kochhar of Investec Capital Services.

In a conversation with ET Now on May 14, 2026, Kochhar stated that the recovery in the markets is supported by fundamentals rather than sentiment alone. He pointed to robust corporate profitability and favorable trade agreements as primary drivers for continued growth despite geopolitical headwinds.

Analysis of the BSE 500 universe indicates that profit growth has been north of 20% quarter to date.

So, Q4 earnings have been really solid. So, just to give you an idea, it is so far quarter to date companies reported, pat growth is north of 20%. Here’s BSE 500, as a pack companies reported quarter to date,

Mukul Kochhar

Kochhar noted that if these current quarterly earnings are annualised, they already align with analyst projections for FY27 earnings. This suggests that corporate profitability may have bottomed out.

Historically, in a growing economy such as India, annualising fourth-quarter earnings often leads to further upside for earnings estimates over the following year.

Beyond earnings, Kochhar identified a structural opportunity in manufacturing exports. He argued that trade agreements are dramatically altering the export competitiveness of India.

Market optimism has remained intact even as investors navigate geopolitical uncertainty and pressures from commodity prices during the first and second quarters of 2026. Kochhar believes that companies possess sufficient pricing power to pass on these higher costs to consumers.

This fundamental strength has allowed benchmark indices to regain momentum and midcaps to bounce back sharply, despite the ongoing conflict in the Middle East.

The IT sector continues to face a different set of dynamics as artificial intelligence reshapes future opportunities. Kochhar addressed concerns regarding AI disruption, noting that IT stocks have experienced repeated selloffs whenever global AI companies announce new features or products.

Kochhar expects earnings estimates for FY27 to either remain stable or increase once the temporary impact of rising commodity prices fades.