Coforge, Persistent Investors Wary Despite Blazing Growth

Profitability has been disappointing for both companies, even though they shone in revenue

- Jas Bardia

Coforge Ltd and Persistent Systems Ltd grew faster than their larger peers in the June quarter that was marked by macroeconomic turbulence and demand uncertainty, but each one is grappling with issues of its own.

Eighth-largest IT services firm Coforge reported $442 million in revenue in the first quarter, up 9.6% sequentially, whereas ninth-largest Persistent Systems reported $389.7 million, up 3.9% from the preceding three months. Sixth-largest LTIMindtree Ltd was the slowest among the mid-caps, reporting a 1.97% increase in revenue to $1.15 billion.

In contrast, three of the largest homegrown information technology (IT) outsourcers including Infosys Ltd, HCL Technologies Ltd, and Tech Mahindra Ltd reported revenue growth between 0.97% to 4.46%. Largest IT outsourcers Tata Consultancy Services Ltd and Wipro Ltd reported a revenue decline of 0.59% and 0.35%, respectively.

Both Coforge and Persistent are the latest Indian IT companies to clock annual revenue over $1 billion, and grew the fastest among the country's 10 largest tech services firms. Both are expected to grow faster than their larger peers in the current fiscal as well.