With the Big Four information technology services providers disappointing the Street, the spotlight is on mid-cap IT providers, which appear to have met expectations, according to analyst reports and management commentary on the demand situation.
Firms such as Persistent Systems (Persistent), Coforge, KPIT Technologies (KPIT), and Cyient performed better on key performance metrics.
Their managements sounded a cautious note, with most having guided for double-digit growth at a time when all the Big Four players are likely to clock in single-digit growth on the back of a strong order book.
The services and solutions company saw its growth driven by the services segment but also logged in record deal total contract value (TCV).
According to a Nomura report, Persistent maintained its strong deal win trajectory and robust pipeline, with a record trailing 12-month TCV of $1.6 billion (including renewals, over 33 per cent year-on-year, or YoY) and new deal TCV of $948 million (over 46 per cent YoY) in an uncertain macroeconomic (macro) environment.
Annual contract value at $1.17 billion was up 24 per cent in 2022-23 (FY23).
Additionally, the company management indicated that the firm aimed at growing 3-5 per cent on-quarter over the next few quarters and sees an improvement in growth thereafter.
The company reported some temporary project ramp-downs in one of the top accounts and a hyperscaler account.
“We expect it to post industry-leading US dollar revenue growth of 16.8 per cent in 2023-24F (FY24F),” said the Nomura report.
This is compared to the 4-7 per cent growth guidance by Infosys for FY24 and negative growth of 3 per cent to 1 per cent in the first quarter of FY24 by Wipro.
The other firm that did very well despite a presence in the banking, financial services and insurance space was Noida-based Coforge, which guided for 13-16 per cent revenue growth in FY24 in constant currency (CC) on the back of a healthy large-deal intake, all-time high executable order book, and diversified business offerings.
“The macro environment is significantly uncertain, but it is also very varied across industries.