He said infotech companies continue to power ahead with good sales and profit growth and after the recent fall in the infotech stocks, the valuations are attractive. There has been a drastic fall in the infotech stocks with most of the frontline scrips like Infosys, Satyam Computers, Wipro, NIIT, Mastek down by 40-50 per cent from their peak levels held in February this year.

BSE Sensex was down by 31 per cent from the peak level of 6,165 on February 14 to 4,251 on May 11 and S&P Cnx Nifty down 25 per cent from high of 1,744 to 1,304.55 May 11.

In last three months (Feb-April), Kothari's Infotech Fund's NAV was down by 16.05 per cent to Rs 32.32 for the growth scheme and Rs 22.10 for the dividend scheme, while its new Internet Opportunities Fund provided negative returns of 11.84 per cent with a NAV of Rs 8.64 at the end of April, since its inception on February 21, 2000 (at the peak of the market). ``The fund has focussed only on fundamentally sound infotech companies and has taken corrective action when we have seen fundamentals deteriorate thereby affecting long term potential,'' the report said.

``We believe that current portfolio has the right composition for achieving sustainable long term returns and hence have not made major changes,'' fund manager R Sukumar of the infotech fund said. The report said that the sell-off in India has been broad based though infotech/media stocks have been the hardest hit. Speculators have reduced long positions and retail interest in the market is also on the wane. Drought like conditions in some parts of the country may retard the the economic activity and sectors depending on rural-offtake may be affected. However, it said that with the drastic fall in the stock prices, valuations of most sector appear attractive and industrial growth seems to be on track.p``If you have the holding power, stay invested in equities and reap the benefits while the fickle and leveraged holders are forced to exit at these low levels, when valuations are looking very attractive,'' Reddy said.