The Nifty IT has outperformed the markets by more than 40 percent so far this year and nearly every stock in the index has done well. The large caps have clocked gains of about 50 percent barring TCS, which is up about 30 percent since the start of the year.

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Investors can look at IT stocks even at these levels, Apurva Prasad, Research Analyst IT at HDFC Securities said in an interview to CNBC-TV18.

Prasad said that tech budgets were getting priority and that incremental revenue addition for IT companies over the next couple of years will be higher than that in the last four years.

He sees good upside in IT stocks over the next one-two years despite the 20-25 percent outperformance versus Nifty.

He said many midcap IT companies will be able to scale up.