The second quarter has been kind not to just IT bigwigs, even mid-tier companies have reported stellar results. At 36% to 78% profits, many have grown faster than frontline software exporters such as TCS, Infosys, Wipro and HCL Tech.
True, the depreciation in the Indian currency had a major role to play in this huge growth in rupee terms. But other factors such as increase in technology spend by foreign companies too have helped.
For instance, RPG Group’s IT company Zensar, which saw its profit more than double from the year-ago quarter, signed 12 deals. Bangalore-based MindTree added nine clients during July-September.
Diverse portfolios was another factor. A major portion of Infotech Enterprises’ revenue comes from manufacturing and retail sectors. Persistent Systems get more business from infrastructure segment and intellectual property-led solutions. Another tech giant, NIIT’s net profit rose 45% year-on-year to `62.4 crore during the quarter. The company specialises in travel and transportation segments.
“We are in a different space. Globally, investments are moving into these segments and we see significant upside potential,” said Mritunjoy Singh, chief operating officer, Persistent Systems.
The good showing has translated into hiring as well. Infotech, for instance, added 724 employees in the period —the highest ever in a quarter.
Moving beyond the traditional markets of US and Europe has helped. Zensar entered into a tie-up with South African companies, while Persistent Systems saw 57% growth in the Asia-Pacific region, quarter-on-quarter.
“Operational performance of mid-cap IT companies has improved. There is not a single stock among mid-cap IT companies that didn’t perform,” said Ankita Somany, analyst, Angel Broking.
In fact, many of the mid-tier companies have been successful in roping in leadership talent from biggies such as Infosys and Wipro and are preparing for a big leap forward. .
Ashok Vemuri joint iGate as chief executive officer and NIIT roped in Sudhir Chaturvedi as chief operating officer in the last quarter.