Now Reading: Mid-cap IT firms outpace large rivals in bank revenue growth
-
01
Mid-cap IT firms outpace large rivals in bank revenue growth
India's mid-sized IT firms are growing revenue from banks and financial services faster than larger rivals, according to a Mint analysis. From FY20 to FY26, revenue from BFSI clients grew at a CAGR of 9.33% to 25.27% for LTM, Coforge, Mphasis and Persistent Systems. For the top five large-cap firms, BFSI revenue grew at 5.67% to 7.19% over the same period. Experts attribute the gap to mid-caps serving challenger banks on a lower base, while large banks are insourcing tech work and consolidating vendors.
Brickwork Ratings separately projects the IT sector's revenue growth at 6.1% in FY26 and 6.0% in FY27, with mid-caps faring somewhat better on growth due to steady deal wins and AI-led revenue. Operating margins are estimated at 20.1% in FY25, recovering to 21.8% in FY27 as digital investments mature. The US and Europe accounted for 52.9% and 32.8% of IT spending in FY25, creating geographical concentration risk, the ratings agency noted.
Indian Opinion Analysis
The two sources split the same story differently. Livemint.com leads with mid-cap IT firms outpacing large caps in BFSI revenue growth, drilling into specific CAGR figures and expert quotes on challenger banks and vendor consolidation. It frames the trend as a structural advantage for smaller, flexible players. Thehindubusinessline.com leads with an aggregate sector growth forecast of 6%, citing Brickwork Ratings, and treats mid-cap outperformance as a secondary supporting detail. The divergence is on emphasis rather than facts: Livemint foregrounds disruption within the sector, while Businessline foregrounds stable macro outlook. The balanced reading is that mid-caps are growing faster from a smaller base, but large caps still dominate in absolute BFSI revenue and face headwinds from client insourcing. Brickwork's FY27 growth projection of 6% will be tested against Q3 results due in October.
Coverage: 2 sources, 2 neutral
Sources (2): livemint.com (neutral report), thehindubusinessline.com (neutral report)
This brief was synthesised by AI from the 2 sources linked above, so one read covers every framing they carry. Methodology and corrections.
Updated: this story now draws on 2 sources.
