Smaller IT firms outpace giants with triple revenue growth in 2025
UTTAR PRADESH, INDIA — India’s smaller IT firms, including Coforge, Persistent Systems, and Hexaware, grew three times faster than the Big Four in fiscal year 2025, signaling a seismic shift in the sector’s competitive landscape.
With revenue growth rates between 13.7%-31.5% versus the 0%-4.3% of Tata Consultancy Services (TCS), Infosys, and HCLTech, these agile players are capitalizing on GenAI adoption and stable leadership to disrupt traditional outsourcing models.
GenAI levels playing field
The rise of generative AI has erased traditional scale advantages, enabling mid-caps like Coforge with 31.5% growth and Persistent Systems with 18.8% growth to compete directly with legacy players.
Kotak Institutional Equities notes that new technologies are inherently deflationary, allowing challengers to cannibalize incumbents’ revenues more aggressively. This dynamic is evident in deal flows, with Coforge securing a $1.56 billion mega-deal with Sabre, a rarity for smaller firms.
They also benefit from focused GenAI integration, avoiding the bureaucratic hurdles plaguing larger peers.
While TCS and Wipro struggle with leadership transitions, mid-caps like Hexaware are leveraging AI to modernize vertical-specific solutions in healthcare, banking, and travel tech.
Leadership stability drives execution edge
Smaller firms’ CEOs average more than 5 years of tenure versus less than 2 years for Big Four leaders, creating strategic consistency. Coforge’s Sudhir Singh, Persistent’s Sandeep Kalra, and Hexaware’s Ramakarthikeyan bring deep institutional knowledge—all three are alums of top firms.
This contrasts sharply with TCS’s K. Krithivasan and Wipro’s Srinivas Pallia, who are still stabilizing their mandates.
Analysts credit this stability for 47.7% year-over-year order backlog growth at Coforge and Persistent’s strategic deal wins in regulated sectors.
Prabhudas Lilladher notes Persistent’s senior leadership hires have directly fueled client mining, while Tech Mahindra and Infosys grapple with restructuring.
Lean operations enable faster client response
With smaller, nimbler teams, mid-caps like LTIMindtree and Mphasis outperform larger rivals in discretionary spending cycles.
A Mumbai-based analyst notes their quicker response times to client needs, particularly in early-stage AI projects. Forrester’s Ashutosh Sharma confirms mid-tiers are more nimble in capturing emerging tech demand where project sizes are still modest.
The operational gap is stark; while Wipro’s order book shrank year-over-year, Coforge logged $2.1 billion in Q4 orders, and LTIMindtree crossed $1.5 billion for two straight quarters.
Bank of Baroda Capital’s Girish Pai attributes this to better execution and specialized vertical focus—advantages increasingly prioritized over brand size in client selections.
