The next few years will see a big growth boost for the midcap IT companies in India, said Raamdeo Agrawal, chairman, Motilal Oswal Financial Services, adding that these firms have done more business in the last four months than the last few years in the country.

According to Agrawal, the midcap IT space looks very interesting as "India has an edge here".

While sharing his views and outlook on markets in an exclusive interview with CNBC-TV18, Agarwal said that he is focusing on figuring out how good or bad the current business conditions are and understanding the impact of the pandemic on the earnings power of the companies.

“Is the earnings power completely gutted or is it impaired forever or is the earnings power intact but currently they are not doing well because of the lockdowns and all? - that particular thing has to be figured out," he said.

He, however, said the earnings power of the auto sector is intact. Speaking about the auto space, he added, “Earnings power of this sector is clearly intact. It will be impacted by the cyclical slowdown or whatever happens but basically the competitive situation and the need for the products and services are intact, it is not going to change.”

In terms of the situation in the banking sector, Agrawal said, “From all the bankers we will try to understand what is going to be the credit cost because it is not visible right now. We don’t know what exactly is going to be the level of credit cost."

Agarwal said that companies with digital strategies are seeing value migration. “This is the biggest opportunity for all old businesses - how they are exploiting the digital power in their own business whether in distribution, whether it is in cost structure, whether it is in sales marketing, wherever digital success is there in harnessing the power of the business."

Citing Zerodha as an example, he added, "Five years back Zerodha was not there and today it has the largest market share, completely on the back of digital strategies – that is a completely new value migration and new company start-up from the ground but the businesses which are already running -- NBFCs, HFCs, banking - getting their digital strategies right is going to be extremely important in a competitive landscape.”