In a remarkable shift across India’s IT services landscape, smaller and mid-cap IT firms—those earning between $1 billion and $5 billion—have surged ahead of the Big Four in fiscal year 2025. According to sector analysts, these agile players have grown at more than three times the pace of their larger peers, leveraging superior execution, strategic leadership, and swift adaptation to generative AI (Gen AI). If current momentum holds, the coming year could deliver a repeat performance.
Crushing the Growth Curve: The Numbers Tell the Tale
Mid-cap leaders like Coforge, Persistent Systems, and Hexaware Technologies posted impressive double-digit revenue growth:
- Coforge: 31.1%
- Persistent Systems: 18.8%
- Hexaware Technologies: 13.7% (Jan–Dec FY)
Compare this to the modest figures—or contractions—among the industry titans:
- TCS: 3.78%
- Infosys: 3.85%
- HCLTech: 4.3%
- Wipro: -2.72%
- Tech Mahindra: -0.21%
The mid-cap outperformers not only held their own but reversed traditional expectations, challenging the assumption that scale inherently equates to stability and success.
Gen AI: The Great Equalizer
The advent of generative AI has disrupted the playing field, allowing nimble players to compete in areas traditionally dominated by large-scale firms. Kotak Institutional Equities describes this as a “deflationary tech shift”, where the advantages of incumbency erode and the agility of challengers is rewarded.
Mid-cap firms have been quicker to integrate Gen AI into their offerings, unburdened by the inertia and internal conflicts that often afflict larger enterprises. As analysts explain, smaller firms are more willing to cannibalize existing revenue streams to gain ground in new, fast-evolving technologies.
Leadership Makes a Difference
Stable and experienced leadership is another factor tilting the scale in favor of mid-caps. The CEOs of top-performing companies bring deep domain experience and have had time to shape coherent, future-focused strategies:
- Sudhir Singh (Coforge): CEO since 2017; ex-Infosys.
- Sandeep Kalra (Persistent Systems): CEO since 2020; ex-HCLTech.
- Srikrishna Ramakarthikeyan (Hexaware): CEO since 2014; ex-HCLTech.
In contrast, the Big Four have experienced leadership transitions in recent years:
- TCS: K. Krithivasan (since 2023)
- Tech Mahindra: Mohit Joshi (since Dec 2023)
- Wipro: Srinivas Pallia (since April 2024)
The consistency in leadership at mid-cap firms has fostered focused strategies, long-term vision, and effective execution.
Mega Deals and Strategic M&A: Coforge Leads the Pack
Among the standout performers, Coforge emerged as the fastest-growing IT services firm. It executed India’s only $1 billion-plus mega deal in FY25—a 13-year, $1.56 billion partnership with Sabre, a travel tech giant. In addition, its acquisition of Cigniti Technologies unlocked revenue synergies and expanded its reach into Fortune 500 accounts.
With FY25 revenues hitting $1.45 billion, Coforge is now the eighth-largest IT firm in India, with a robust $2.1 billion order pipeline—a record for the company.
Persistent Systems and the Power of Focused Strategy
Persistent Systems’ rise stems from strong specialization in regulated verticals, such as BFSI and healthcare. Backed by strategic leadership hires and an aggressive sales engine, the firm has consistently closed large strategic deals and deepened client relationships.
Despite macroeconomic uncertainty, CEO Sandeep Kalra remains optimistic, citing no deal cancellations but a cautious pace in closures—one that Persistent is addressing through enhanced investments in sales and marketing.
Why Mid-Caps Are Winning: The Analyst Take
Analysts agree that the performance gap is real—and perhaps sustainable:
- Girish Pai (BoB Capital): Mid-caps are gaining market share from Tier-1 players due to better execution and leaner operations.
- Unnamed Mumbai-based Analyst: Smaller teams translate into faster turnaround times and closer client engagement.
- Ashutosh Sharma (Forrester): In nascent tech trends like AI, smaller firms can act quickly and decisively, winning discretionary spend that later matures into larger projects.
The Divergence Is Stark—and Growing
While the Big Four struggle with shrinking order books, reduced mega deals, and leadership churn, mid-caps are building a reputation for reliability, specialization, and innovation. Companies like LTIMindtree, Mphasis, and L&T Technology Services are also capitalizing on this wave, with growth ranging from 4.4% to 8.2%, clearly outperforming several larger peers.
The Road Ahead: FY26 Looks Bright for the Nimble
If forecasts hold, Coforge could clock 20.8% growth in FY26, up from 16.4% in FY25. Analysts expect Persistent Systems to maintain its growth trajectory, and even LTTS and LTIMindtree are anticipating stronger performances next year.
The message is clear: size is no longer a guarantee of success in the rapidly evolving IT landscape. In the era of Gen AI and rapid innovation, speed, specialization, and leadership clarity are the new superpowers—and mid-caps are wielding them with confidence.