IT stocks are beginning to offer bank FD-like dividend yields. But is that a trap for investors?

India's IT sector faces significant headwinds as major stocks including TCS, Wipro, and LTIMindtree have fallen over 50% from their all-time peaks, pushing dividend yields close to 6 percent, comparable to bank FD rates from SBI and HDFC Bank. JPMorgan has downgraded HCL Tech, Wipro, and Tata Technologies citing AI-led deflation and demand uncertainty, while maintaining TCS, Infosys, Tech Mahindra, Coforge, Persistent, and Sagility as top picks. The sector's revenue growth has been stuck at 2-3% for three straight years, with the top four largecap IT names trading at a 36% discount to their 10-year average P/E, and Q1 earnings season set to begin with TCS reporting on July 9.