Digital deals in information technology have started scaling up and the adoption of digital is growing deeper and broader, said Parag Gupta, India TMT Analyst, Morgan Stanley.

Speaking exclusively to CNBC-TV18 from the sidelines of Morgan Stanley Investor Summit, he said, "Telecom is seeing a paradigm shift in the way Indians will consume data and voice offerings going forward."

He said the house had upgraded their view on information technology to an attractive rating earlier in the year, because there are various factors that are coming into play, which are positive for the industry.

One, there is increased spending by customers.

Second, the fear of slowdown in information technology spend have abated. Moreover, with global growth picking up, it gives significant lever to customers to spend.

Three, customers in US are beginning to spend, which could be on back of some new US tax laws.

All these factors bode well for the technology providers and think this could benefit the Indian vendors, Gupta added.

He said the fourth quarter earnings by Indian information technology company was very positive and none of the companies they are in touch with are talking about any impediments to growth in the near-term. However, one will have to keep a keen eye on this going forward, said Gupta.

With regards to midcap companies, he said, "Companies that are delivering growth both on revenue and earnings better than expectations are trading at premium multiples.”

The earnings growth could continue for these companies even going forward, because the earnings had factored in rupee at 65 to the dollar, whereas rupee has depreciated and a one percent change in the rupee adds 20-30 basis points to the margins for the companies, Gupta said.

Meanwhile, there are also select largecap that look interesting at the current juncture, companies those who are less dependent on just few customers.

Talking on data consumption, he said, "Data pricing has to reduce for demand to become more elastic. One is seeing a massive increase in data consumption. So, there is significant pressure on tariffs and it could be unsustainable for some but not for all."