Another quarter goes by, and mid-sized IT firms are once again outshining the traditional heavyweights. Persistent Systems, Coforge, Mphasis, LTTS, and even Tech Mahindra are doing what the Big Four—TCS, Infosys, Wipro, and HCLTech—can’t seem to manage: deliver growth backed by real AI traction.
Just like in Q4 FY25, the pattern in Q1 FY26 is unmistakable. The midcaps are no longer trying to catch up—they’re pulling ahead.
Take Persistent Systems, for instance. The company reported ₹3,333 crore in revenue this quarter, up nearly 22% year-on-year. Profits surged nearly 39% to ₹425 crore. In dollar terms, the revenue stood at $389.7 million, up 18.8% from last year.
This growth isn’t a one-off. Persistent has now clocked 21 consecutive quarters of double-digit year-on-year revenue growth. It’s doing what the giants no longer can.
The company’s Total Contract Value (TCV) for the quarter stood at ₹4524.55 crore ($520.8 million), with Annual Contract Value (ACV) at ₹3347.37 crore ($385.3 million). Its top 10 clients still contribute 42% of revenue—a sign that large accounts are sticking around.
The number of clients delivering more than $5 million (about ₹43.44 crore) annually also inched up, showing a steady climb in customer value.
CEO Sandeep Kalra attributed the company’s success to its platform-driven AI strategy. Founder Anand Deshpande said that their early investments in AI—not vague promises, but actual tech embedded in deals—are now paying off.
Coforge Beats Everyone All Together
Coforge is on an even sharper trajectory, becoming the seventh largest IT firm. The company posted ₹3,689 crore in revenue for Q1 FY26, a staggering 56.5% jump year-on-year and 8.2% sequentially.
Profits more than doubled, rising 138% over last year. While others talk about AI potential, Coforge is building actual platforms like AgentSphere, a library of over 100 AI agents targeting pain points in travel, BFSI, and healthcare.
CEO Sudhir Singh is clear about where the company is headed, and it’s not towards speculative use cases. The company signed five large deals this quarter, and its order book for the next twelve months is up 46% from a year ago.
Meanwhile, Mphasis might not have delivered the same top-line fireworks, but it booked the highest TCV in eight quarters— ₹6602.65 crore ($760 million)—with 68% of those wins being AI-led. Revenue growth was modest at 0.4% sequentially and 9.2% year-on-year. But that’s not the story.
The real narrative is about execution. CEO Nitin Rakesh made it clear that their early push into AI has begun to translate into client wins across the board. Mphasis is already deploying AI to overhaul platforms in areas like wealth management, not just experimenting with proof-of-concepts.
Hexaware posted modest growth in the second quarter of calendar year 2025. However, a sharp rise in one-off costs and slower-than-expected deal momentum weighed heavily on margins.
The company reported Q2 revenue of ₹3,260 crore ($382.1 million), marking a sequential growth of 1.6% in INR and 2.8% in USD. Year-on-year, revenue was up 11.1% in INR. That said, the tepid quarter-on-quarter increase has raised concerns about growth saturation.
Margins also took a hit, dropping to 12.4% from 16.5% in Q1 and 14.7% in Q2 last year. The company attributed the decline to a steep jump in other expenses, which rose to ₹142 crore from just ₹8.7 crore a year ago.
L&T Story
L&T Technology Services (LTTS) reported ₹2,866 crore in revenue this quarter, growing 16.4% year-on-year. While the top line impressed, profit growth remained muted at just 0.7%. Margins slipped due to cost pressures, but the company’s deal flow and innovation efforts are anything but sluggish.
With a $50 million deal and several more in the $10–$30 million range, LTTS is clearly expanding its base. The launch of its proprietary PLxAI framework and a new AI and cybersecurity-focused design centre in Texas shows that it’s not just talking about the future—it’s building for it.
When it comes to LTIMindtree, the story is similar to LTTS. The firm reported a revenue increase of 0.7% quarter-on-quarter (QoQ) and 7.6% year-on-year, reaching ₹9,840.6 crore, while net profit rose 11.2% QoQ to ₹1,254.6 crore.
“We had a promising start to the year delivering broad-based growth, expanding margins, and making significant progress on our strategic priorities,” Venu Lambu, CEO and managing director of LTIMindtree, said. He attributed the growth to ongoing sales transformation, the adoption of AI, and operational discipline.
Tech Mahindra Sees Profit Growth
Tech Mahindra, which had struggled in recent quarters, reported a strong 34% year-on-year growth in net profit. Revenue grew slightly at 2.7% to ₹13,351 crores, largely due to client delays, but the profit spike signals improved internal discipline.
The company booked ₹7,028 crore ($809 million) in new deals and deployed over 200 AI agents. CEO Mohit Joshi remains bullish on a hybrid model where humans and AI agents collaborate at scale, and it seems to be working, at least on the margin front.
Speaking of which, strong margin expansion and robust deal momentum kept the narrative optimistic. “We have delivered seven consecutive quarters of margin expansion, a clear reflection of the discipline and focus across our organisation,” said Rohit Anand, CFO, highlighting the success of Project Fortius in driving operational efficiencies even in an uncertain environment.
The project is envisioned to improve its operating margin to 15% by the end of fiscal year 2027.
The Not so Big Four
Compare this to the Big Four, and the contrast couldn’t be starker. Wipro may have doubled its large deal bookings to ₹23,456.8 crore ($2.7 billion) and rolled out over 200 enterprise AI agents, but its topline declined by 2.3% in constant currency.
TCS posted a 1.3% revenue growth, but that’s where the good news ended—constant currency revenue declined by 3.1%. The company’s TCV dropped significantly, and whatever AI revenue it once claimed to be building has now conveniently disappeared from earnings calls.
HCLTech had one of the loudest AI quarters in terms of announcements with its partnership with OpenAI. But revenue barely moved, and profits dropped nearly 10% from the previous year.
Infosys claims to have built 300 AI agents and that is the driver for the revenue growth. The company reported a profit of ₹6,921 crore for Q1 FY26, an 8.7% increase year-on-year and a revenue increase of 7.5% QoQ to INR 42,279 crore. But the performance was still mellow when compared to smaller firms.
The problem with these giants isn’t just that they’re moving slowly. It’s that the numbers no longer back the story. Everyone is talking about AI being “part of every deal,” yet no one is willing to break down what that actually means in revenue terms.
In contrast, mid-sized Indian IT firms are more focused, more agile, and more realistic about their strengths. This pivot began last year when firms like LTIMindtree invested in startups like Voicing AI and partnered with GitHub to roll out Copilot for developers.
Mphasis launched NeoCrux to enhance developer productivity. Persistent acquired a privacy-first AI consultancy, Arrka. These moves were small but strategic. They’re already showing up in revenues, deal wins, and client stickiness.
The Indian IT landscape is no longer just about size. It’s about speed, clarity of execution, and willingness to bet on the future without being paralysed by legacy models.
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