Long-term story for IT stocks like TCS, HCL Tech, Infosys remains good, but be cautious: Rajat Rajgarhia

In a chat with ET Now, Rajat Rajgarhia, MD-Institutional Equities, Motilal Oswal Securities shares his views on IT stocks.

ET Now: Is the correction in large cap IT stocks justified or overdone?

Rajat Rajgarhia: The correction isn't overdone right now. While currencies is a moving driver, Infosys, TCS and Accenture suddenly had some caution in the their tone in the last three weeks.

Infosys and TCS had more in context of this quarter and Accenture had more in context of their guidance. This did not add well to an already trend of appreciating currency. If you see the appreciating currency trend to persist for a while, you will need that much bigger dollar revenue growth for the companies to come.

While these stocks have corrected 10-15% from their highs, stock like TCS, HCL Tech, Cognisant, etc. have multiplied in the last three-four years.

While the long-term story remains very good, we always have to brace ourselves for few quarters or year of under performance in these names.