Banking in near term may outperform IT because of earnings traction: Rohit Agarwal

Due to softness in near term demand, IT may not witness great traction in the next two quarters, and the earnings cut is expected to continue along with EPS cuts in most of the IT stocks. However, IT companies are expected to become good bargain buys after one to three quarters, as they are cash rich with high operating yields. Until then, banking is expected to outperform IT in the near term, as there is earnings traction and deposits in banks are growing.