High-flying IT funds are taking a breather. Good time to invest?

When Covid hit the world like a sledgehammer, forcing offices to go virtual overnight, savvy investors smelled an opportunity in the IT sector. Their thinking? With everyone working from home, IT companies would be printing money hand over fist. This drove investors to pour their hard-earned cash into IT stocks. Fund houses weren't far behind. They flooded the market with new IT funds, from just 5 before the pandemic to 21 by April 2024. Investor money gushed in, too, with the total assets rocketing from Rs 1,669 crore in January 2020 to Rs 36,744 crore just four years later. But as the world returned to normalcy, the IT party came to a halt. A one-two punch in the shape of a slowdown in the US and Europe and India's BFSI and telecom sectors triggered a bloodbath in IT stocks in 2022. (The telecom sector, in particular, contributes a hefty 8-10 per cent to the topline of these