Mid-sized IT services companies are emerging as strong contenders in securing and delivering large contracts, a space historically dominated by larger peers. Companies such as Coforge, LTIMindtree, and Persistent Systems have reported significant wins and revenue growth in FY25, contrasting with the more subdued performance of major firms like Tata Consultancy Services (TCS), Infosys, and HCLTech.
Coforge signed a $1.56 billion, 13-year contract with Texas-based Sabre, making it the only domestic mid-tier IT firm to close a mega deal in FY25. In the March quarter, Coforge reported $2.1 billion in new orders, its highest to date. It has also expanded its client base in higher revenue segments, including the $5–10 million and $10 million-plus brackets.
Similarly, LTIMindtree recorded the largest deal in its history, a $450 million seven-year contract with a global agribusiness company. Sonata Software secured a $73 million deal in the TMT sector, and L&T Technology Services (LTTS) posted its highest-ever bookings in the March quarter, which included contracts worth $80 million and $50 million.
These developments translated into faster growth. In FY25, mid-tier firms such as Mphasis, Hexaware, Persistent Systems, and Coforge reported revenue growth ranging from 7% to 32%. This outpaced top-tier competitors, with TCS, Infosys, and HCLTech posting around 4% growth, and Wipro reporting a 2% decline.
The final quarter reinforced the trend. Coforge posted 4.7% sequential growth in Q4FY25, with revenue reaching Rs 3,410 crore. LTTS grew 12.4% to Rs 2,982.4 crore. In contrast, top-tier firms missed revenue estimates despite announcing sizable deals.
Analysts attribute the performance of mid-tier companies to quicker decision-making, steady leadership, and early adoption of generative AI. Kotak Institutional Equities noted that newer technologies tend to favour more agile firms willing to shift away from legacy business models.
Stable leadership has also played a role. CEOs at Coforge and Persistent have been in place for over five years, compared with recent changes at TCS, Wipro, and Tech Mahindra. This is seen as contributing to more consistent strategy execution.
Clients are also opting for smaller, flexible contracts, often involving preparatory work for technologies like generative AI. These contracts are typically more aligned with the capabilities of mid-tier firms, allowing them to grow their presence in digital transformation programmes.
Larger firms, while still securing substantial contracts, have offered conservative guidance for FY26 amid macroeconomic concerns. TCS reported $12.2 billion in deal wins in Q4, up from $10.2 billion in Q3, but growth forecasts remain tempered by factors such as global tariff issues and constrained discretionary spending.