GLOSSARY: Mid-Sized Indian IT’s AI Advantage

While TCS, Infosys, Wipro and HCLTech navigated another cautious quarter with 'AI-first' strategies, their mid-sized peers did something extraordinary.‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌

Mid-Sized Indian IT's AI Advantage

THE BELAMY

Weekly Newsletter of AIM

Monday, Jan 27, 2026 | By Mohit Pandey

Now, subscribe to our Digital & Print Editions >

While TCS, Infosys, Wipro and HCLTech navigated another cautious quarter with 'AI-first' strategies, their mid-sized peers did something extraordinary. They grew faster, beat expectations and executed with greater precision in a market still uneasy about demand and pricing.

Persistent, Coforge, Mphasis, and LTIMindtree faced the same headwinds as the Big Five. Labour codes hurt margins, clients demanded higher productivity, and AI compressed revenue even as it helped win new deals.

Yet, on growth, deal quality, and delivery momentum, the mid-caps appeared healthier than the giants they often trail. In a season where scale failed to guarantee speed, execution made the difference.

Coforge and the End of AI Experiments

Coforge delivered the strongest statement of the quarter—not just in revenue, but in posture. "Almost 100% of the wins and new contracts being awarded to us are AI-infused," chief executive Sudhir Singh said on the earnings call. "The age of AI experimentation is over."

That was more than marketing. Revenue rose 4.4% sequentially in constant currency to ₹4,188 crore. Order intake reached $593 million in a quarter that is typically soft. The executable order book for the next 12 months climbed to $1.72 billion, more than 30% higher than a year ago.

Year-to-date dollar growth now stands at 32.8%. Among Indian IT firms, that pace is exceptional.

What stands out is how Coforge frames AI. It chose n0t to disclose an AI revenue line. Singh did not speak of pilots or platforms. He talked about impact, as he did in the last quarter, possibly taking a dig at its peers who reported standalone AI revenues.

Coforge's strategy is depth, not breadth. It serves roughly 600 clients. Singh revealed that around 95% of revenue comes from repeat business. The top five clients grew 51% year to date, while the top 10 grew 47%.

Against large firms, the contrast is sharp. TCS leaned into scale with $1.8 billion in annualised AI revenue. HCLTech chose precision, reporting $146 million in advanced AI revenue. Coforge chose silence on AI revenue and clarity on delivery, an approach that mirrors, to some extent, Infosys, Wipro and Tech Mahindra.

The AI Foundry by Tredence in Chennai: A Workshop for Builders of Real-World AI

The AI Foundry hosted by Tredence, in association with AIM, is heading to Chennai. On February 7, senior AI and data science professionals will gather for an invite-only developer workshop focused on one question that matters right now: How to move from experimenting with AI to actually building systems that work in the real world? Click here to register now.

Mphasis and the Fight Against Cheap AI

If Coforge projected confidence, Mphasis projected caution.

Revenue rose 2.6% sequentially and 12.4% year on year to a little over ₹4,000 crore. The growth was not the real story. Pricing was.

"The race to the bottom is a very risky race," chief executive Nitin Rakesh said after the results. "'Let's cut the price' is a very discreet conversation. You have to fundamentally go after redoing how you deliver the service itself."

Rakesh's warning cuts to the core of AI's impact on IT services. Clients are no longer satisfied with optimising people's costs. They want to reduce effort, especially in run operations.

There is a limit to how much cost can be cut through optimisation alone, he said. The real question, according to him, is whether 30-40% of the roles required to do this work can be eliminated altogether.

Mphasis, however, still bills largely through traditional models. Time and material contracts make up 46.8% of revenue, fixed-price contracts contribute 44.8%, and transaction-based work makes up 8.4%. There is still little clarity on the exact AI work that these firms are doing, but that is a story for another time.

Yet, clients are already measuring productivity. One customer set GitHub metrics for contractors. They still pay by the hour, Rakesh said, but expect outcomes powered by AI. He also pushed back against fears that software demand would collapse. Legacy systems, he argued, still represent a hundred billion-dollar opportunity.

"I have not seen any enterprise telling me I am going to reduce the number of engineers," he said. "What they are telling us is I have a backlog that goes out two years."

Persistent and LTIMindtree Run Ahead

Persistent and LTIMindtree delivered the clearest growth surprises of the quarter.

Persistent closed with $422.5 million in revenue, up 4.01% sequentially and 17.3% year on year. LTIMindtree reached $1.2 billion, growing 2.4% sequentially and 6.1% from last year.

More quietly, both outpaced four of the Big Five. TCS grew 0.6%, Infosys 0.5%, Wipro 1.2%, and Tech Mahindra 1.5%. Only HCLTech moved faster.

For once, mid-caps were the growth story.

"This confidence is supported by our execution discipline, improved deal momentum, and the traction we are seeing across our AI-led offerings," LTIMindtree chief executive Venu Lambu said.

Persistent flagged strong demand from banks and healthcare, where data modernisation and application revamps are finally turning into contracts. "We are also applying agentic AI within our own operations, as a 'customer zero' to improve productivity and accelerate adoption at scale," CEO Sandeep Kalra said.

The tone stood in contrast to the large firms, which continue to warn of weak demand and low single-digit growth for a third straight year.

But this growth came with a regulatory bill attached. Persistent's operating margin fell 190 basis points to 14.4% after a one-time ₹89 crore labour code charge. LTIMindtree took a much heavier hit: labour codes wiped out ₹590 crore.

Margins crashed to 10.6%. Without the charge, they would have risen to 16.1%.

AIM Network>>

The IMF labelled India a 'second-tier AI power'. IT minister Ashwini Vaishnaw responded with a $100 Billion reality check.

In this episode of Front Page, we analyse the narrative war shifting from Davos to Delhi. With up to $100 billion in investments expected at the upcoming India AI Impact Summit, is India truly playing catch-up, or is it becoming the world's AI execution engine?

Across the top 10 IT firms, labour code impact crossed $575 million this quarter.

Net profit told a similar story. LTIMindtree stayed flat at $150 million. Persistent fell 6.8% to $48.3 million despite faster growth.

AI, meanwhile, remained largely in the background. Neither firm reported AI-specific revenue. Both said AI was helping them win deals. Yet, Lambu admitted something more uncomfortable. AI is cutting revenue from the largest clients.

"Every customer goes through its productivity journey," he said. The top five clients are the biggest accounts, which explains the short-term decline.

The translation is simple. AI helps clients do more with less. Until those journeys stabilise, the biggest accounts will shrink.

So why do mid-caps look better? Their advantage this quarter came from three places.

First, speed. Smaller deal bases and sharper focus let them convert AI-led demand faster.
Second, positioning. Coforge sells transformation, not tools. Mphasis defends pricing. Persistent chases modernisation. LTIMindtree pushes execution.
Third, expectations. When big firms talk about AI, they defend margins and pipelines. When mid-caps talk about AI, they talk about delivery and share gains.

In the large firms, AI rescued the narrative. In the mid-caps, AI reshaped the business. The risk is also clearer here. AI wins deals. AI cuts revenue. Margins absorb shocks from regulation. And the buffer is thinner.

Thriving Through Tech Change: A Leadership Guide to Supporting Mid-Career Talent

Tech change is accelerating, and leaders can't afford to fall behind. Thriving Through Tech Change: A Leadership Guide to Supporting Mid-Career Talent, from Snowflake and AIM, is a practical leadership playbook for adopting smart tools with confidence, while keeping human judgment, empathy, and control at the centre.

Designed for non-technical leaders, it offers clear guidance on upskilling teams, reducing uncertainty, and supporting mid-career professionals through rapid change.

Gain insights from industry leaders Yeshwanth S, director of data analytics and transformation at IQVIA, and Shubhosree Dasgupta, country data and analytics officer at HSBC, as they share real-world perspectives on leading transformation at scale. Register now and lead change with clarity, not chaos.

Now, subscribe to our Digital & Print Editions >

For Brand collaborations, reply to this email or write to info@aim.media