While Indian IT stocks have experienced significant value erosion this year, losing more than ₹10 lakh crore in market value, two mid-tier IT companies have demonstrated remarkable resilience. According to The Economic Times, Coforge is up 7% year-to-date and LTIMindtree has gained 1%, standing apart from the broader sector selloff. This performance gap reflects the mid-cap companies' strategic focus on AI-related projects and recent overseas acquisitions in the artificial intelligence segment.
Persistent Systems reported 3.8% quarter-on-quarter growth in consolidated revenues to ₹4,303 crore in the June 2026 quarter, as reported by The Financial Express. The company derives a large portion of its operational income from AI-led projects for global clients, enabling this growth trajectory. However, the company faced margin pressure with net profit declining 8.7% quarter-on-quarter to ₹483 crore, primarily due to rising sub-contracting costs that grew 7.4% quarter-on-quarter to ₹667.1 crore. Despite operational challenges, the company secured strong new order wins of $1.14 billion compared to $600.8 million in the previous quarter.
Coforge achieved 5.2% quarter-on-quarter growth to ₹5,527 crore in constant currency terms, benefiting from the integration of its California-based Encora acquisition, according to The Financial Express. The company's 12-month executable order book reached a record $2.23 billion, up 44.2% year-on-year, providing better revenue visibility than many peers. AI-led engineering, data and cloud services accounted for 86% of Q1 revenue, with more than 30% of active engagements already using AI. The Encora acquisition has doubled Coforge's healthcare business and added high-tech as a new vertical, with one Encora client already among the combined entity's top 10 accounts.
LTIMindtree has emerged as a standout performer with 21% gains in the past month, making it one of the sharpest rebounds in the sector. The company has reorganized itself around three lines of business: iRun, iTransform and Business AI, with AI revenue reaching a quarterly run-rate of $150 million. Deal inflows stood at $1.7 billion during the quarter, including two large deals from a US multinational company and a US insurance company. The company has launched a five-year plan called Lakshya 31 to almost double revenue to about $10 billion by FY31 through organic growth and selective acquisitions. Motilal Oswal maintains a Buy rating with target price of ₹4,900, implying about 21% upside from current market price of ₹4,037.
Analysts now prefer mid-tier IT companies over large caps due to their stronger positioning in AI transformation. CLSA noted that select mid-tier companies look more attractive than largecap IT names, stating they prefer good quality mid-tier operators over large caps having high managed services exposure ripe for AI disruption. The mid-tier firms' performance offers investors a rare stable option in an industry where largecap names have struggled to defend valuations. Axis Securities raised Coforge's target price to ₹2,275 from ₹1,690 and maintained a Buy rating, while Elara downgraded the stock to Reduce after its sharp rally, citing limited upside after a rise of more than 50% in four months.
