Mid-tier IT caught between shrinking deals and rising costs

Pune | Mumbai: India’s mid-cap IT firms have posted their worst set of numbers in the past few years in the just concluded quarter, following cuts in client budgets, deferred projects and rising costs of local talent in the US and Europe.

The slowdown in spending on banking, financial services and insurance (BFSI) has emerged as a key concern, industry insiders said, even as they remain wary of a spillover effect into other verticals.

Margins at MindtreeNSE 1.05 %, which has changed owners, dropped to their lowest in eight years in the June quarter, while growth has been largely flat at L&T Infotech. Persistent Systems reported a 3% drop in dollar revenue, while Cyient posted its worst quarterly numbers in a decade.