New Delhi, Aug. 21 -- Indian equities have become an unlikely AI hedge, DSP's Jay Kothari told Mint Money. India's stubborn underperformance may actually signal a turnaround in the near future.

Kothari estimates that Indian equities have cumulatively underperformed emerging and global markets by nearly 70% over the past two years. This gap is something markets haven't previously witnessed at this scale. Kothari believes this unusually-wide divergence will eventually mean-revert, allowing India to outperform.

Historically, India had outperformed comparable markets significantly before AI dominated global narratives. Before the AI-led rally, Indian equities had compounded at roughly 20%, compared with gains of 5-6% in Korea and Taiwan.

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