IT midcaps witness BFSI-led growth as larger peers take a hit

At a time when large IT companies are seeing BFSI (banking, financial services and insurance) vertical-led softness, the same is aiding the growth of some midcap companies. The reason: smaller IT firms cannibalising the BFSI revenue of larger companies.

Companies such as Sonata Software, Coforge and Birlasoft have been witnessing growth driven by the BFSI vertical. For instance, Sonata’s revenue, which used to derive 7% from BFSI two quarters ago, is now deriving three times more at 21% of its revenue. Its fourth-largest vertical two quarters ago, BFSI has become its third-largest vertical in Q2FY24.