Coforge, Persistence Systems and Hexagon Technologies Ltd reported revenue growth rates of 31.5%, 18.8% and 13.7%, respectively, in the previous fiscal year. To be sure, Hexaware follows the fiscal year that was founded in January, while other local IT services companies follow the financial calendar for April and March. Meanwhile, TATA Consulting Services Ltd, Infosys Ltd and HCL Technologies grew 3.78%, 3.85% and 4.3%, respectively, while Wipro Ltd's revenue fell 2.72%.
Historically, all of these companies have bid for different projects, but the rise of AI has enabled smaller companies to compete with larger peers over the past 12 months.
“Deflation technology”
“By nature, new technologies tend to be deflationary, headwinds for challengers and opportunities for challengers. In addition, the difference in technical expertise (skills + scale) in new technologies helps challengers, which will be difficult to actively incorporate Gen AI into its service scope, allowing people to better integrate into larger challenges, thus allowing larger challenges to gain greater challenges, which can allow larger challenges to party larger challenges, and thus allow challengers to gain greater scope. Incumbents,” Kawaljeet Saluja, Sathishkumar S. and Vamshi Krishna said in a May 2 report.
Stable leaders also help. Coforge, Persistent and Hexaware each have CEOs (CEOs) who have held positions for more than five years.
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Srikrishna Ramakarthikeyan took over as CEO of Hexaware in August 2014, while Sandeep Kalra took over as CEO of Persistent Systems in October 2020. Both are former HCLTECH employees who have worked at the company for more than a decade. Sudhir Singh took over as CEO of Coforge in May 2017. He worked at Infosys for over nine years.
This is contrary to TCS, Wipro and Tech Mahindra, which have less than two years of experience at the helm with new CEOs.
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K. Krithivasan took over as CEO of TCS in June 2023, while Mohit Joshi joined Tech Mahindra as CEO in December 2023. Srinivas Pallia is the latest contestant to the CEO Club after taking over Wipro in April last year.
This suggests that work experience in larger IT services companies may help CEOs of smaller IT outsourcing companies grow faster.
“We forecast strong 20.8% organic c/c revenue growth in FY26, an acceleration from 16.4% in FY25E on the back of (1) strong broad-based growth momentum across geos, verticals and services, (2) healthy increase in 12-month order backlog, up 47.7% yoy and 10.3% qoq buoyed by the Sabre deal; (3) strong deal win trajectory and pipeline and (4) Cigniti’s F-500 account from Coforge.
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Smaller peer-endurance systems are expected to keep their momentum going.
Persistence
“PSYS'(Persistent Systems) unique value proposition and its strong play around regulated verticals are keeping it more resilient in this adverse environment. Additionally, the investments around hiring senior leadership team within key verticals have been instrumental in fueling client mining/hunting activities and closing large strategic deals,” said Prabhudas Lilladher analyzes Pritesh Thakkar and Sujay Chavan in a note dated 24 April.
While Coforge expects a strong FY26 in its trading wins and pipeline, L&T Technology Services Ltd's management expects FY26 to be better than FY25, just like TCS.
Currently, mid-sized IT service companies including LTIMINDTREE LTD, MPASEIS LTD, COFORGE LTD, Persistent Systems Ltd, Hexaware Technology Ltd and L&T Technology Services Ltd surpass their large peers.
CRRC reported annual revenue growth between 4.43% and 29.15%, while the annual revenue growth rate of large caps was 4.3% annually, lower than the worst mid-sized companies.
Differences
This difference in performance suggests that smaller IT service companies have much better economic uncertainty than peers with greater economic uncertainty.
Coforge is the best performer in the Indians last year, as revenues are flooded from the Hyderabad engineering services company Cigniti, which was purchased in May last year. Kovger also became the only company in his peers to sign a mega deal, worth more than $1 billion last year. It ended in March 2025 with full-year revenue of $1.45 billion.
The Noida company also signed a $1.56 billion 13-year contract with Saber, a Texas travel technology company.
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Large deals and Cigniti's acquisition make Coforge the eighth largest IT services company in India. The CEO of Coverger said that like TCS, fiscal 26 is expected to be a “strong year of growth” behind the company's strong order pipeline, when he spoke to analysts on a phone call after the company's tribute on Monday.
At least one executive said IT companies will need a stable trading pipeline to withstand macroeconomic uncertainty.
“Feet shuffle”
“We haven’t seen any cancellations yet, we’re seeing a certain number of feet dragging down on the settlement. I personally think that in our industry we need more pipelines to book, whether it’s lasting or others. Call April 24.
The key point of the Big Five is its slender order book. TCS and Wipro's order book started FY26, which was smaller than the order book at the beginning of FY25, while Infosys made less revenue in FY25 transactions, meaning weaker revenue growth in the coming year.
By comparison, Cofort reported $2.1 billion in orders from January to March, the strongest order in its quarter, while Ltimindtree's orders exceeded $1.5 billion in contract value in the second quarter of orders.
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However, the problem does not end here. Experts say the CV model is swallowing up the revenue of the big hat.
“The TIER-2 suites have been taking market share from the Tier-1 setup due to better execution and smaller sizes. And unlike past cycles, their performance over Tier-1 is largely due to better management teams.”
Smaller team
A third analyst said mid-sized companies also work with smaller teams, and a more professional focus allows them to gain a deeper understanding of their clients and get more work.
“Medium-sized teams work faster than large teams, which makes it easier for them to respond to customer requests,” said an analyst based in Mumbai.
The fourth analyst partially agreed with the assertion that Chinese stocks could have lunches for larger peers, adding that smaller IT services companies could respond more quickly to customer demand when the latter wants to increase their non-essential technology spending.
“As time goes by, it’s small when new opportunities like digital or artificial intelligence emerge. Slowly, projects get bigger, and in the initial stages of such discretionary spending scenarios, the project size is small (we’re now some mid-covers), where they build skills and abilities in that space in a timely manner in which they respond to these effects in a timely manner,” announced the response to these spaces,” Ashutosh Sharma said.
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