Mid-cap IT firms are quietly widening the growth gap with larger peers, leveraging sharper deal ramp-ups, vendor consolidation opportunities, and sustained demand in select verticals, even as macro headwinds keep overall sector momentum in check.
Brokerage estimates for Q4FY26 suggest a familiar pattern: muted growth for tier-1 IT firms, contrasted by relatively stronger performance among mid-tier peers. According to a Motilal Oswal Financial Services (MOFSL) report, large-caps are likely to post sequential constant currency (cc) growth in the range of -1.0 per cent to 1.5 per cent, while mid-caps are expected to outperform once again with -0.5 per cent to 3.5 per cent growth. Similarly, JM Financial Institutional Securities pegs mid-tier year-on-year (y-o-y) cc growth of 3 per cent to 22 per cent band, and -0.3 per cent to 3.6 per cent cc quarter-on-quarter (q-o-q) growth.
At the top end of this spectrum is Persistent Systems, which will lead the mid-cap pack, according to a majority of brokerages. A HSIE Research report highlights Persistent’s continued strength, driven by momentum in BFSI and technology verticals, estimating 3.4 per cent q-o-q cc growth. MOFSL also expects Persistent to achieve the highest sequential growth of around 3.5 per cent q-o-q cc growth.
Paving the way
This is followed by Coforge and Mphasis, who, according to a report by Equirus Securities, will trend toward the upper end of the 1.8 per cent to 3.6 per cent q-o-q cc growth range, supported by steady deal wins and ramp-ups. HSIE similarly forecasts 2.5 per cent growth for Mphasis, aided by strong BFSI deal traction, while MOFSL expects Coforge to deliver 1.5 per cent growth, accompanied by a 160 basis point (bps) margin expansion as wage hike pressures ease.
“We believe Coforge’s strong executable order book and resilient client spending across verticals bode well for its organic business. Encora’s acquisition expands its presence in the hi-tech and healthcare verticals. We continue to view Coforge as a structurally strong mid-tier player well-placed to benefit from vendor consolidation/cost-takeout deals and digital transformation,” the MOFSL report noted.
Brokerages point to mid-caps benefiting from a mix of deal ramp-ups, vendor consolidation opportunities, and sustained demand in select verticals like BFSI, healthcare, and hi-tech.
Even as macro uncertainty, geopolitical tensions, and cautious client spending weigh on large deal conversions, the mid-tier cohort continues to find growth pockets through agility and execution. In a quarter where growth is scarce, that operational edge is proving enough to keep mid-cap IT a step ahead of its larger peers.