Mphasis and Coforge Post Strong Quarter as Sonata Faces Seasonal Slump

what happened

According to Moody's, Mphasis Ltd closed the quarter on a high note, with revenue up 3.2% from the previous quarter to $486 million in the July-September period. That was the company's best second quarter in five years, and almost three-quarters of the incremental revenue came from financial institutions. Coforge was the fastest-growing firm among India's mid-sized IT services companies, with revenue rising 10.1% to $652 million. Sonata Software reported revenue of $256 million, down 26% from the previous quarter, as its domestic business, which mostly sells licences, slowed in a seasonally weak period.

Shares of three midcaps fell the day after reporting: Persistent, Hexaware and Firstsource dropped 1.7%, 5.9% and 4.4%. Coforge shares, by contrast, jumped 4.9%. On Friday, Mphasis and Sonata shares closed 0.6% and 0.9% lower on the BSE.

why it matters

The results point to uneven demand across India's IT sector, where midcaps grew faster than larger peers in the first half, yet investors are reacting to margins and guidance. Uncertain demand, geopolitical tensions in West Asia and the risk that AI erodes time-based billing remain the key factors to watch.

market impact

Indian mid-cap IT shares: mixed results, Coforge gains while Hexaware and Persistent slide.

• ↔Indian mid-cap IT shares mixed — Coforge's strong report supports the stocks, while weak Sonata results and other firms' outlooks weigh

tags

instruments