💻 At a glance
While the big IT boys—TCS, Infosys, and Wipro—are busy discussing “cost optimization” and firing campus hires for being too fresh, India’s midcap IT players are quietly devouring high-margin niche contracts, pivoting into futuristic tech, and doing the one thing large IT forgot: growing.
Welcome to 2025, where KPIT, Tata Elxsi, LTTS, and Coforge are making traditional IT look like the Nokia 1100 of tech services.
🚨 What’s Going On?
- Large IT = Boring BFSI outsourcing + USD revenue headwinds + attrition drama
- Midcap IT = AI, EVs, embedded systems, aerospace, digital transformation, OTT, IoT, and all the cool buzzwords your dad doesn’t understand
Result? While Infosys posts 1% QoQ growth and cuts guidance, midcaps are out here dropping 20–30% YoY profit growth and casually bagging multi-year global contracts.
📈 The Midcap IT Avengers — Who’s Who
| Company | FY25 Revenue | FY25 PAT | 3Y Stock Return | Core Focus |
|---|---|---|---|---|
| KPIT Tech | ₹4,007 Cr | ₹562 Cr | +523% | Automotive software, EVs |
| Tata Elxsi | ₹3,413 Cr | ₹768 Cr | +480% | Design + Embedded systems |
| LTTS | ₹10,282 Cr | ₹1,504 Cr | +150% | ER&D, semis, plant digitization |
| Coforge | ₹9,230 Cr | ₹1,115 Cr | +210% | Travel, BFSI, digital core |
Yes, you read that right. These aren’t just tech companies. These are revenue-generating, high-EBITDA-margin, dollar-minting midcap beasts.
🤖 What They’re Doing That Infosys Isn’t
| Thing | Midcap IT | Largecap IT |
|---|---|---|
| Real AI Deployment | ✅ (actual implementation) | ❌ (PowerPoint slide) |
| EV & Auto Clients | ✅ (KPIT, Elxsi) | ❌ (mostly BFSI) |
| Custom IP & Patents | ✅ (Tata Elxsi owns 75+ IPs) | ❌ (outsourced talent mills) |
| High Growth Guidance | ✅ (15–20% growth) | ❌ (single-digit, if lucky) |
| Fresh Hires | ✅ (train internally) | ❌ (ghost job offers) |
🔬 Case Study 1: KPIT Technologies
🚗 From Pune to Porsche
- Clients: BMW, Renault, Honda, VW Group
- 35%+ of revenue now from EV-focused software solutions
- Focus: ADAS, autonomous driving stacks, EV powertrain software
- FY25 PAT: ₹562 Cr (up 47% YoY)
- EBITDA Margin: 20%+
Roast: While Infosys tries to sell outdated SAP modules to US banks, KPIT is busy making your Tesla smarter.
🎨 Case Study 2: Tata Elxsi
🧠 Where Design Meets Engineering
- Clients: OTT giants, auto OEMs, med-tech players
- Services: UI/UX + Embedded Systems + OTT Platform Development
- FY25 PAT: ₹768 Cr (up 22%)
- Operating Margin: 28%+ (yes, higher than Infosys)
They design dashboards for EVs, OTT UIs for streaming platforms, and interfaces for next-gen health tech.
Roast: TCS builds your tax filing app. Elxsi designs the car you flex on Instagram.
🧪 What’s Driving the Outperformance?
- Global diversification: Midcaps are present in 20+ countries, but without 20+ layers of bureaucracy
- Real niche: They aren’t generalists—they dominate specific verticals (auto, med-tech, plant digitalization)
- Agility: They can pivot faster than your cousin who tried dropshipping and crypto in the same year
- Ownership Culture: Promoter skin in the game. Elxsi = Tata Group. KPIT = Ravi Pandit-led.
⚠️ Red Flags (Because Not Everything Is Perfect)
| Concern | Reality |
|---|---|
| High valuations? | Yes. KPIT trades at ~75x P/E. Elxsi at ~60x. |
| Client concentration risk? | Also yes. Some midcaps depend heavily on 1–2 major OEMs. |
| Slowdown in US/Europe? | If EV or semis get hit, so do midcaps. |
| Attrition issues? | Better than large IT but still exists. |
🏆 EduInvesting Take
Let’s not kid ourselves — Infosys, TCS, and Wipro are still behemoths. But they’re like government employees of IT — stable, risk-averse, and allergic to innovation.
Meanwhile, KPIT, Tata Elxsi, Coforge, and the like are startups with profit, agile with IP, and most importantly — focused.
They don’t want to do 1,000 things badly. They want to do 3 things amazingly well — and get paid in dollars while doing it.
🤖 If You Only Remember 1 Line…
“Midcap IT isn’t playing catch-up anymore. They’re running a different race — and winning it.”
📅 Written by Prashant Marathe
📍 Date: 31 May 2025
Tags: Midcap IT India, KPIT Tech, Tata Elxsi, Coforge, LTTS, Infosys vs Midcap, EV software stocks, embedded systems India, EduInvesting sectors 2025
