Mid-tier IT companies saw a higher sequential growth in the second quarter of fiscal 2025, driven by their focus on AI-led strategies, steady deal inflows, and growth in key verticals such as banking and financial services (BFSI) and also continued to outperform their larger peers in terms of revenue growth.
On an average the top domestic IT services companies including – Tata Consultancy Services, Infosys, HCLTech, and Wipro – reported a 2-3% revenue growth on a sequential basis, while the midcap IT companies, including Persistent Systems, Coforge, Mphasis, and Birlasoft, rose 5-6% organically.
While their growth remained in the upward trajectory, the management maintained their cautious outlook for fiscal 2025 due to continued macroeconomic disruptions such as higher interest rates in the US, the region which they cater to the most, and furloughs in the December quarter.
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Revenue and Profit Growth
Mphasis’s revenue from operations rose 3% quarter-on-quarter to Rs 3,536.15 crore in July-September. Further, the net profit increased 6% quarter-on-quarter to Rs 544.2 crore.
“Despite many ongoing challenges, the macro environment continues to trend in the right direction. Savings led transformation thesis is core to all our deal archetypes and solutions, thus significantly enhancing service delivery and savings for clients,” Nitin Rakesh, Chief Executive Officer of the company said.
Persistent Systems reported a 6% sequential increase in net profit, reaching Rs 325 crore, and a 6% rise in consolidated revenue to Rs 2,897.1 crore. The year-on-year figures are even more impressive, with net profit jumping 23.4% and revenue increasing by 20%.
Sandeep Kalra, Chief Executive Officer and Executive Director, Persistent said: “This quarter, we continued to strengthen our capabilities and advance our AI-led, platform driven services strategy.”
Meanwhile, Coforge reported a consolidated revenue from operations of Rs. 3,062 crores, reflecting a rise of around 27.5% quarter-on-quarter and of which nearly 7% was organic. And the company’s net profit increased to Rs. 234 crores, representing a growth of around 68%.
“The large deals pipeline is looking very robust and an even strengthening order executable which now is 40% higher year-on-year gives us confidence that the quarter and quarters to come shall see robust and sustained growth,” CEO Sudhir Singh said.
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