We are in Sankat Kaal, and in this Sagar Manthan, our job is to find the next generation of winners: Saurabh Mukherjee

At the ET Alpha Wealth Summit in Mumbai, Saurabh Mukherjee, Founder and Chief Investment Officer, Marcellus, gave one of the most exciting lectures of the evening. While others spoke of Amritkal and AI-kal, he introduced a third term: Sankat kal. Not to alarm, but to enlighten. Because according to him, understanding disruption is the only way to find the opportunity within it.

India’s economic direction has arrived, and manufacturing exporters, not consumer-centric darlings, will drive the next wave of EPS growth. The era of 100 PE consumer stocks is fading; Five years from now, it will be the well-managed commodity exporters who will command the spotlight. Every major free market economy reinvents itself every 30 years — America did it, China did it, and now it’s India’s turn.

“We are in a crisis period, but we will come out of it, and in this Sagar Manthan, our job is to find the next generation of winners, the companies that will drive India forward,” Mukherjee said.

Apart from Mukherjee, leading fund managers, Vikas Khemani, Founder and Chief Investment Officer, Carnelian Asset Management and Advisors, Hiren Ved, Director and CIO, Alchemy Capital Management and Kailash Kulkarni, CEO, HSBC Mutual Fund, ‘Bharat or Amritka-AI?’ was part of a panel discussing India’s Next Decade’. Kshitij Anand, Editor-Market & Finance, ET Digital, moderated the panel discussion

India is falling behind, and the data proves it

Mukherjee opens with an uncomfortable truth. India’s Nifty 50 dollar EPS CAGR, measured over 3, 5, 10 and 20-year periods, hovers around 6% only. The S&P 500 delivers 11%. In the last five years, India has fallen behind not only the US but also the East Asian economies and Vietnam and Bangladesh in export competitiveness.

The culprit, in part, is a $400 billion surge in IT and services exports, which has quietly crippled India’s manufacturing exporters for decades, forcing them to compete globally with one hand tied behind their backs.

AI is a wrecking ball hitting India’s middle class

A more immediate disruption, Mukherjee argued, is happening right now within corporate India. AI is systematically eliminating well-paid white-collar jobs at scale. He pointed to the annual reports of ICICI Bank, HDFC Bank, Bajaj Finance and TCS as evidence, each showing 5,000 to 20,000 jobs cut from the headcount.

The downstream effect is already visible in the property market. Residential real estate in Gurgaon and Hyderabad is, in his words, “almost stagnant” as the loss of IT and tech jobs erodes the purchasing power of India’s most affluent urban middle class.

Rupee will depreciate further and that is good news for manufacturers

Here is where Mukherjee’s thesis becomes contradictory. As IT exports weaken under AI pressure, the rupee’s historic 40% depreciation accelerates to close to 50% per decade. For white-collar workers, it’s painful. For India’s manufacturing exporters in Gujarat, Coimbatore and Ludhiana, it was a long-awaited level playing field.

“Five years from now,” he told the panel, “it will be the exporters of manufactured goods who will be the toast of the town.” He believes that the era of consumer-centric companies commanding 100 PE multiples is slowly coming to an end.

Gig work and the rise of Tier II cities

Mukherjee also identified a quiet but profound social change. Dispatched IT professionals are bypassing the job market altogether, turning to platforms like Upwork to bid for global projects and doing so from Indore, Nashik, Dehradun and Coorg instead of Bangalore or Gurgaon. With AI tools enabling a sole practitioner to bill $50,000 in one to two days, the economics of big city life no longer stack up.

The result: Big city real estate faces continued inventory pressure, while Tier II and Tier III markets, both residential and commercial, look increasingly promising.

Stable compounders still hold their ground

Despite the upheaval, Mukherjee’s faith in a clean, well-run business with consistent returns on capital remains intact. Auditing his 2016 book Uncommon Billionaires, he found companies like Asian Paints, Marico and HDFC Bank beating the benchmark. The buzz around disruptive IPOs and new-age businesses, he cautioned, rarely survives exposure to long-term data.

One of his structural concerns: the rising cost of capital globally will compress valuations in the West and India alike. The era of cheap money, he bluntly said, is behind us.