Real technology bets will define India's market future: Shankar Sharma

At the Business Standard BFSI Insight Summit 2025, investor Shankar Sharma said India's markets are poised for asymmetrical returns as technology and AI reshape global investing

India’s financial markets could witness asymmetrical returns in the coming years as technology-led sectors begin to reshape the investment landscape, veteran investor and GQuants founder Shankar Sharma said at the Business Standard BFSI Insight Summit in Mumbai on Friday (October 31).

 

Speaking on the theme “Investing in financial markets in an AI-driven world” in a conversation with A K Bhattacharya, Sharma said that while India’s equity market remains services-heavy, the market composition does not yet reflect the growing dominance of technology. “Services dominate our market pie chart. Tech is zero. How can this anomaly last? It will have to change,” he said.

 

India’s markets lack genuine technology representation

 

Sharma drew a distinction between IT services and true technology firms, saying companies such as TCS and Infosys are not representative of core tech. He argued that India’s markets lack genuine technology players, which has kept indices like the Nifty from reflecting the sector’s global growth potential.

 

He noted that India’s equity indices have struggled because they do not include pure technology companies. “Cement and steel industry stories are done and dusted. There will be a bet on tech alone. We know it’s a high-risk thing, but there’ll be asymmetrical returns available there,” he said.

 

AI reshaping investment strategies

 

Describing how artificial intelligence (AI) has influenced his investment approach, Sharma said his portfolio strategy has evolved from traditional methods to being “80–90 per cent data and AI-driven.”

 

AI, he explained, has enabled him to expand the scope of opportunity-seeking and execute a higher number of smaller bets alongside larger ones. “Instead of taking a small number of large bets, because of AI I can take a large number of small bets and a small number of large bets simultaneously. I have created optionality through AI,” he said. 

 

Caution against overreliance on AI

 

However, Sharma cautioned against excessive dependence on AI, especially in areas requiring independent judgement. “AI will not change what you intrinsically are. But the danger lies in overusage of AI. The last thing you want from AI is to tell you that you are right. Being a contrarian means you have to question everything, including yourself,” he said.

 

AI in finance: Too early to call it transformative

 

On the wider implications of AI in the financial sector, Sharma said it was still too early to predict whether it would fundamentally reshape the industry. “AI is too new to form conclusions. It doesn’t know where it’ll be in five years. It is not a holy grail that every entrepreneur is looking for. It is very imperfect,” he remarked. 

 

Global markets deliver extraordinary returns

 

Turning to global markets, Sharma described the current period as one of extraordinary returns. “Global market returns have been off the chart — the best year of my life as a global investor,” he said.

 

He welcomed the shift towards greater fiscal responsibility in the United States, saying it would strengthen markets in the long run. “Tariffs are not necessarily bad — they will make the US more fiscally responsible in the long run,” he said.

 

Oil, commodities and market implications

 

Sharma was optimistic about oil and commodities, noting that high crude prices hurt global growth. “It’s in no one’s interest to have high oil prices. The world loves bull markets but we hate a bull market in oil,” he said, adding that the ongoing bear market in crude was beneficial for consumers and growth.

 

Diversification and asset allocation advice

 

On asset allocation, Sharma advised investors to diversify beyond equities. “Equities cannot be your only allocation if you want to be a truly safe investor. Equity should not be more than 30 per cent of your portfolio,” he said.

 

He concluded that while AI and technology will define the next phase of market growth, prudent diversification and contrarian thinking will remain essential to navigate volatility.