AI priced into IT, gradual impact on finance; gold and autos in focus: Axis MF

Shreyash Devalkar, Head of Equity of Axis Mutual Fund, said gold inflows reflect normal asset rotation trends. He also said he remains positive on the auto sector due to demand and product cycles, while gold remains the core commodity allocation in multi-asset portfolios. By Alpha Desk Artificial intelligence (AI) is starting to influence multiple parts of the financial ecosystem, including IT services, financial services, and general portfolio allocation trends, according to Shreyash Devalkar, Head of Equity of Axis Mutual Fund, which manages funds worth over $40 billion. He said the impact is currently more visible in IT sector growth expectations, while financial services may see a gradual change due to regulatory structures. He also noted that AI and global macro trends are shaping how investors allocate money across equities, commodities and other asset classes. While AI is changing business processes across industries, financial services remain regulated, which can slow large-scale disruption. He said, “AI is having an impact on multiple things. Obviously, financial services is one of them.” Also Read | Not AI, Indian IT services face this real risk: Prashant Paroda He added that the sector has already gone through digital transformation phases, and regulatory frameworks require risk checks before large structural changes happen. He said, “Since this sector is regulated, there are multiple aspects of risk to be taken into consideration.” IT sector already pricing AI impact Devalkar said the AI impact is currently reflected more in the growth expectations for the IT services sector. He said current projections already factor in slower pricing growth and moderate revenue expansion. He said growth for IT services companies is being estimated at mid-single digit levels, reflecting expectations of pricing pressure and slower demand growth. He also said companies are trying to use AI to reduce costs, which may help improve operating efficiency over time. Gold flows reflect asset rotation, not structural shift On fund flows, Devalkar said asset rotation across classes is normal. He said inflows move toward asset classes showing strong performance over time. He said, “This rotation is part and parcel… when any asset class performs, flows get attracted to them.” Also Read | Global uncertainty drives market volatility; India relatively stable: Emmer Capital CEO He added that central bank gold buying and currency concerns are supporting gold allocation trends globally. Auto sector supported by demand and product cycle Devalkar said he remains positive on the auto sector due to demand recovery and product cycle improvements across segments such as two-wheelers, passenger vehicles and commercial vehicles. He said the key risks remain commodity price movement and competition from imported vehicles in some segments. Gold preferred over silver in multi-asset allocation Devalkar said multi-asset portfolios typically allocate meaningful exposure to gold and silver, but gold remains the core allocation due to supply dynamics and lower volatility compared to silver. Also Read | US trade deal done, fund managers now watch earnings and foreign flows He said volatility in silver is higher, and allocation decisions depend on relative pricing and market conditions. For the full interview, watch the accompanying video Catch all the latest updates from the stock market here (Edited by : alphadesk )