According to Ajay Khandelwal, Fund Manager at Motilal Oswal AMC, who spoke at the Moneycontrol’s Mutual Fund Summit 2026 – Ahmedabad Edition, India’s earnings and investment cycle is progressively expanding, and the next stage of growth is probably going to come from mid- and small-cap companies rather than just the Nifty 50 heavyweights.
According to Khandelwal, earnings projections are still reasonable. “This year, we are assuming an earnings growth of about 12%. After commodities volatility, margins have stabilized, deleveraging has taken place, and the base is correct,” he stated.
He noted that more capital-light and scalable companies are driving the current cycle’s capacity expansion, in contrast to the previous one, which focused it in capital-intensive industries like cement, power, and roads. “Structural multiples have increased because capital intensity has decreased,” he stated.
Khandelwal explained why growth is moving outside of the Nifty 50 by pointing out that the Nifty firms’ share of India’s total profit pool has been continuously declining.
“Nifty 50 companies accounted for almost 65% of profits fifteen years ago. That figure is more like 55% now. He stated that “profit growth is obviously coming from beyond the Nifty,” citing manufacturing, industrial, and consumer businesses as the main drivers of this change.
Regarding volatility, Khandelwal rejected the notion that large stock movements are exclusive to small-caps. When earnings fall short of expectations, even large-cap stocks see sharp drops. He stated, “Volatility is across segments.”
Khandelwal shared his contrarian predictions, stating that despite recent underperformance, Motilal Oswal AMC is still positive on IT companies. “We have high hopes for IT. Although AI adoption is still in its infancy, he continued, “things are evolving extremely quickly.”
