Midcap IT space looks cheap, says Dipen Sheth

Dipen Sheth, head of institutional research at HDFC Securities told CNBC-TV18, "Midcap IT sector is enticingly cheap. For some reason this kind of discounting is justified because there is a scare about how easy is it going to be to deploy people in the US from India, caps on visas and hiring. Structurally, the margins could fall. We have had lots of analysts downgrading some numbers. I think it is important to get a slightly longer term picture here."

He further added, "If you notice IT has been a sector that has created lot of wealth over the last couple of decades in this country. It has attracted the best talent, it's a sector where we can beat the rest of the world and we have shown that repeatedly." "These are challenging times for the IT sector. If the sector lives up to its reputation, then some of the midcap names or largecap names, the kind of multiples that they are trading for look alluring as of now. The languishing midcaps trading like MindTree at sub 10 and NIIT Tech which is a slightly smaller company for sub 7. There is no lack of business traction in these companies so I think this is a very good time to look at IT," Shah said.