Investors are looking beyond the big IT stocks – Infosys, Tech Mahindra, HCL Tech and Wipro while making investments in this sector. And that’s because of the lacklustre performance of these big IT companies in the September 2025 quarter, with revenue growth on a constant currency basis varying from 0.3 % q-o-q to 2.4 % q-o-q.
In contrast, comparatively smaller and nimbler players with a strong focus on AI and related technologies, like Persistent Systems, Coforge and LTIMindtree have reported revenue growth on a constant currency basis between 2.4 % q-o-q to 5.9 % q-o-q in the September 2025 quarter.
It’s no surprise that Persistent Systems share price has gained nearly 11 % over the past six months to Rs 5,868 during intra-day trading on Monday, while Coforge has jumped 24% to Rs 1,829 intra-day during this time period. Meanwhile, Infosys and Wipro share prices have gained barely 1.5% over the past 6 months. The broader Sensex has gained nearly 5.6% over the past six months.
The Q2 Scorecard: Mid-Caps Shine Brighter
Persistent Systems reported a constant currency growth of 4.4% quarter-on-quarter growth in its consolidated revenue from operations to Rs 3,580.7 crore in the September 2025 quarter. The Pune-based IT company is an AI-led, platform-driven digital engineering and enterprise modernization partner, and it benefited from strong performance of its BFSI segment, which accounted for 34.8% of its revenues in the September 2025 quarter vis-a-vis 33.9% in the June 2025 quarter.
Its core operating profit margin was 19.1% in the September quarter, a rise of 70 basis points on a q-o-q basis. The company benefited from its employee benefit expenses that were 54.4% of revenues in the September 2025 quarter vis-a-vis 54.8 % in the June 2025 quarter.
And, Persistent Systems’ net profit at Rs 471.4 crore in the September 2025 quarter, grew nearly 11 % on a q-o-q basis.
Meanwhile, New Delhi-based Coforge, with its focus on product engineering and leveraging AI, grew its revenues by 5.9 % q-o-q in constant currency terms to Rs 3,985.7 crore in the September 2025 quarter. The New Delhi-based company benefited from its other segment – healthcare, retail, hi-tech and manufacturing segment, which accounted for 27% of revenues in the September 2025 quarter vis-a-vis 26.7% in the June 2025 quarter.
Its core operating profit margin of 18.4 % in the September 2025 quarter, a rise of 270 basis points on a q-o-q basis. The company benefited from its employee costs as a percentage of revenues that were 57% in the September 2025 quarter vis-a-vis 60% in the June 2025 quarter. And its net profit of Rs 425.4 crore in the September 2025 quarter grew nearly 48.6% on a q-o-q basis, possibly one of the fastest amongst all IT company results announced so far for the quarter under review.
And LTIMindtree grew its revenue by 2.4% q-o-q on a constant currency basis to Rs 10,394.3 crore in the September 2025 quarter, and its technology, media and communications vertical accounted for 25.4% of its revenues in the September 2025 quarter vis-a-vis 23.2% in the June 2025 quarter. Its core operating profit margin of 18.6 % in the September 2025 quarter, a rise of 180 basis points on a q-o-q basis. This Mumbai-based company benefited from employee benefit expenses at 62.2 % in the September 2025 quarter vis-a-vis 64.8 % in the June 2025 quarter
Its net profit at Rs 1,381 crore in the September 2025 quarter grew a healthy 10.1 % q-o-q in the September 2025 quarter.
And larger rival, Wipro, earlier reported its IT services revenue grew a lackluster 0.3% q-o-q in constant currency terms to Rs 22,640.5 crore in the September 2025 quarter.
Wipro’s core operating profit margin meanwhile also improved 60 basis points q-o-q to 20% in the September 2025 quarter, helped by lower employee costs. However, Wipro’s net profit fell nearly 2.2% quarter-on- quarter to Rs 3,262.4 crore in the September 2025 quarter.
Pipeline Check: Who Won the Big Deals?
With regard to future growth opportunities, TCV (new deal wins), for Persistent Systems has a TCV of $ 609.2 million at the end of the September 2025 quarter vis-a-vis $ 520.8 million at the end of the June 2025 quarter.
Similarly, Coforge had a TCV of $ 514 million at the end of the September 2025 quarter vis-a-vis $ 507 million at the end of the June 2025 quarter.
And LTIMindtree had an order inflow of $1.3 billion at the end of the second quarter of FY26 vis-a-vis $ 1.63 billion at the end of the June 2025 quarter.
The above three players have not given a specific growth forecast for the second half of FY26.
For larger players like Wipro, its TCV was $ 4.68 billion in the September 2025 quarter vis-a-vis $ 4.97 billion in the June 2025 quarter.
The Street will be keeping a close eye on these new deal wins and how quickly they will translate into revenue for IT companies over the next few quarters.
Wipro has marginally improved its guidance – it has provided for a sequential guidance of -0.5% to 1.5% in constant currency terms in the December 2025 quarter, with IT Services revenue to be in the range of $2.59 to $2.64 billion (excluding the recently announced acquisition of Harman Digital Transformation Solutions).
Hiring Trends: Where is the Talent Moving?
The comparatively smaller and nimbler IT companies are taking advantage of the future growth opportunities and expanding their workforce. For instance, Persistent Systems had 26,224 employees at the end of the September 2025 quarter vis-a-vis 25,340 at the end of the June 2025 quarter.
And Coforge had 34,896 employees at the end of the September 2025 quarter, a growth of 709 on a sequential basis. For LTIMindtree, it had 86,447 employees at the end of the second quarter of FY 26 vis-a-vis 83,889 at the end of the June 2025 quarter.
Meanwhile, Tech Mahindra’s IT headcount at the end of the September 2025 quarter was 78,528 employees vis-à-vis 79,987 at the end of the June 2025 quarter.
Valuation Verdict: Paying a Premium for Growth?
Persistent Systems and Coforge trade at a P/E of more than 50 times its estimated consolidated FY26 earnings. LTIMindtree trades at a P/E of more than 30 times estimated consolidated FY26 earnings.
Wipro at Rs 243 intra-day on Monday trades at a P/E of more than 18 times estimated consolidated FY26 earnings.
Clearly, the smaller IT companies are relatively expensive as they factor in the growth opportunities in the short-term. Larger IT stocks trade at much lower valuations, given sluggish growth expected.
Amriteshwar Mathur is a financial journalist with over 20 years of experience.
The writer and his family have no shareholding in any of the stocks mentioned in the article.
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