IT mid-caps stick to steady growth amid uncertain macros.

The focus has shifted to mid-cap IT players, such as Persistent Systems, Coforge, KPIT Technologies, and Cyient, who have met or exceeded expectations and performed better than the Big Four IT services players. These mid-cap firms have guided for double-digit growth, while the Big Four players are likely to clock in single-digit growth on the back of a strong order book.
Persistent Systems, for example, saw growth driven by the services segment and logged in record deal total contract value. The company has maintained its strong deal win trajectory and robust pipeline, with a description trailing 12-month TCV of $1.6 billion and a new deal TCV of $948 million. The company also expects to grow 3-5% on-quarter over the next few quarters and sees an improvement in growth afterward.
Conversely, coverage guided for 13-16% revenue growth in FY24 in constant currency on the back of a healthy large-deal intake, all-time high executable order book, and diversified business offerings. The company gifted Apple iPads to all its employees as it crossed the $1 billion milestone and signed over $300 million order intake for the fifth consecutive quarter.
LTTS saw broad-based growth with a robust deal pipeline in transportation, industrial products, and medical verticals. The company’s CC revenue guidance for FY24 at above 20% was higher than the growth achieved in FY23. KPIT’s development came from robust demand that the auto sector had seen in the past year, and the firm guided for FY24 growth at 27-30%. These mid-cap firms said they sailed through the quarter with little impact from macro uncertainties.