In this episode of the State of the Economy podcast, BusinessLine’s Haripriya Sureban talks to Sumit Pokharna, a Research Analyst and Vice President at Kotak Securities, regarding the growth prospects of mid-tier IT companies in India.

The discussion commences by acknowledging the industry’s slowed growth momentum, attributed to macroeconomic factors and geopolitical concerns, including global issues and client demands. While larger IT companies grapple with challenges stemming from reduced discretionary spending, mid-tier companies capitalise on their smaller client base and expedited deal execution.

One pivotal factor contributing to the success of mid-tier companies is their smaller size, facilitating swifter deal execution and revenue growth. Furthermore, their focus on cost management, margin expansion, and aligning earnings with revenue has fortified their position in the market.

As the conversation delves deeper, they explore the various niches that mid-tier IT companies target. It becomes evident that an emphasis on cloud transformation, automation, and digital transformation has yielded positive results for many mid-tier firms.

The podcast also addresses the contrast between the modest guidance from larger players and the retained guidance of mid-tier companies. Sumit warns that mid-tier companies might experience some near-term challenges as they navigate fluctuations in client spending.

They further discuss the margin expansion strategies that mid-tier IT companies are adopting. Measures for cost control, reduced headcount rates, and lowered employee costs are helping these firms maintain competitive margins.

Host: Haripriya Sureban.

About the State of the Economy podcast

India’s economy has been hailed as a bright spot amid the general gloom that seems to have enveloped the rest of the world. But several sectors continue to stutter even as others seem set to fire on all cylinders. To help you make sense of the bundle of contradictions that the country is, businessline brings you podcasts with experts ranging from finance and marketing to technology and start-ups.