India's service economy powers over 55% of GDP, and it's just getting started. Are you invested in this next wave of wealth creation?
. Today, services contribute over 55% of India's GDP and employ more than 40% of its workforce, making the sector the backbone of India's growth narrative2.
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ET Spotlight
Financial services
Information technology
Telecom
Healthcare
Consumer and retail services
Media and entertainment
Investors looking to build a portfolio focused on India's services growth story
Those who prefer a diversified thematic fund over a single-sector play
Long-term investors aiming for capital appreciation with a 5-year+ horizon
In recent times, life is flowing through services. Whether it's tapping an app to book a cab or order food, manage finances through UPI, or seek healthcare via teleconsultation, our everyday experiences are increasingly driven by service-led innovations.For investors looking to be part of this shift, it presents a timely investment opportunity. Before we dive into it, let's take a look at the bigger picture.India's consumers are now digital-first, convenience-led, and value-focused. Behind this shift lies a robust services ecosystem spanning banking, healthcare, entertainment, education, logistics, telecom, and beyond. What was once confined to metros and high-income users is now mainstream across tier-2 and tier-3 cities.From real-time payments to cloud-powered startups, from digital classrooms to doorstep diagnostics, services are now deeply woven into everyday essentials, creating demand, generating jobs, and unlocking new markets.Traditionally, India's economy moved from agriculture to manufacturing. But services have taken the lead, now accounting for more than half of the NSE 500's total profits. Post-pandemic, this momentum has accelerated.Telemedicine, remote work, digital payments, and e-commerce saw rapid adoption, permanently altering consumer behaviour. Government-led digital public infrastructure like UPI, CoWIN, ONDC, and DigiLocker has further catalysed service-led growth at scale.This is no longer a trend. It's a megashift.To help investors tap into the full potential of this transformation, Axis Mutual Fund has launched the Axis Services Opportunities Fund, a diversified, open-ended equity scheme focused exclusively on service-led businesses. The fund is designed to capture high-growth opportunities across a wide set of sectors, including:Its flexicap approach allows the fund to invest across large, mid, and small caps, ensuring agility and depth in stock selection. The strategy is actively managed, with a high active share, enabling meaningful differentiation from the benchmark to seek alpha. By following a bottom-up, quality-focused approach, the fund seeks out scalable companies with sustainable competitive advantages, strong financials, and sound governance.Unlike broader equity funds or narrowly focused sectoral funds, the Axis Services Opportunities Fund offers a diversified thematic approach, allowing investors to capture the breadth of India's expanding service economy while managing risk through sectoral spread. Its core proposition is that it will invest at least 80% of its assets in companies aligned with the services theme spanning 48 basic industries, including Capital Markets, Finance, Power, IT, Healthcare, Banks, and more. The remaining up to 20% can be invested outside these sectors at the fund manager's discretion, providing flexibility to adapt to evolving opportunities.*(Data as of 31st March 2025)India's services sector is not just growing, it's evolving. Today's businesses in this space boast stronger Return on Equity (ROE) and Return on Capital Employed (ROCE), reflecting improved fundamentals.Even with such momentum, valuations remain relatively attractive, especially when compared to their non-services counterparts. Meanwhile, the sector is expected to see higher earnings growth, with two of the top three PAT (Profit After Tax) growth sectors coming from services.In short, strong fundamentals, rising profitability, and compelling valuations make this a ripe moment for investors to consider thematic exposure to services.Just as India's IT boom of the early 2000s created wealth for long-term investors, the rise of the broader service economy can pave the way for the next wave of value creation. The Axis Services Opportunities Fund offers a smart way to participate in this megatrend with a thoughtfully constructed, actively managed, and future-ready portfolio that mirrors India's changing economic fabric.As services quietly reshape how we live, work, and transact, investors now have a way to grow with this transformation.The future is being served. The question is - are you invested in it? Learn more about the Axis Services Opportunities Fund here 1. Link 2. Link
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