'AI to hit IT revenues, but new opportunities will emerge'

She’s managing ₹28,000 crore. She’s betting against the IT crowd. While most investors chase the AI hype, Meeta Shetty is quietly repositioning portfolios and questioning where the real growth will come from. In this no-holds-barred interview, the Tata AMC fund manager reveals why small-cap valuations are flashing red, how she's protecting her funds from an IT slowdown, and the few under-the-radar opportunities she’s still excited about. If your portfolio has any tech exposure, you’ll want to read this before your next move.   With over Rs 28,000 crore under her watch across six mutual fund schemes, Meeta Shetty, Fund Manager at Tata Asset Management, has nearly 15 years of investing experience behind her. A CFA charterholder with earlier stints at HDFC and Kotak Securities, she began her career tracking pharmaceuticals before expanding to IT and telecom. Today, she oversees many portfolios, including Tata’s Digital India Fund, Pharma & Healthcare Fund, and Multicap Fund. In this conversation, she discusses why valuations in small- and mid-cap stocks are looking stretched, what makes her stock-picking radar tick, and how she’s positioning for challenges in IT amid the AI wave. From ROCE-led frameworks to coping with sectoral churn, Shetty lays out her investing playbook—and the macro risks that could derail growth. What’s your outlook on the Indian equity markets right now? Given the sharp run-up in several sectors, is it tough to find reasonable valuations for deployment? Yes, I think so. Over the last three to four months, we’ve seen quite a bit unfold. Initially, there was a sharp correction, especially in some of the mid- and small-cap names. This was followed by a strong recovery—equal to or even slightly higher than the earlier decline—in just the last couple of weeks. So yes, from here on, finding opportunities—particularly in the mid- and small-cap segments—is becoming a bit of a challenge. However, at least when I look at the small-cap universe, it remains quite broad. Today, the small-cap category starts at around Rs 33,000 crore in market cap, and investable ideas can go all the way down to companies with a market cap of around Rs 7,000 crore. The investable universe is still large. Therefore, I wouldn’t want to bucket the entire small-cap space as being expensiv