The Indian IT sector is buzzing again, with Coforge and Persistent Systems leading the charge after reporting impressive Q3 FY25 results. Investors reacted positively, driving Coforge’s stock up by 10% and Persistent Systems up by over 9% in early trade.
These two mid-cap IT players have consistently delivered robust growth, and their latest earnings further strengthen their positions in the sector. But with global economic uncertainties and an evolving tech landscape, the big question remains—can this rally continue?
Also read: Indiamart Q3 2025 Results: Strong Profit Growth of 47.87% YoY
A look at Q3 FY25 numbers
Coforge: Strong revenue growth and a new acquisition
Coforge reported a 10.3% YoY jump in net profit to ₹268 crore, backed by a strong 42.8% YoY revenue surge.
| Metric | Q3 FY25 | Q3 FY24 | QoQ Change |
| Net profit | ₹268 crore | ₹255.9 crore | Up 10.3% |
| Revenue | ₹3,318.2 crore | ₹2,323.3 crore | Up 42.8% |
| EBIT | ₹519 crore | ₹402 crore | Up 29.3% |
| Interim dividend | ₹19 per share | – | – |
- Revenue grew 8.4% sequentially in constant currency terms.
- Signed four large deals worth $501 million in North America and ASEAN.
- Announced the acquisition of US-based Xceltrait Inc. for $17.85 million, strengthening its cloud and security services.
Stock impact: Coforge soared 10%, locking in an upper circuit at ₹9,047.60 on the BSE, with analysts predicting a potential rally toward ₹10,000 – ₹10,500.
You may also read: Tanla Platforms Share Price Drops 7% After Q3 Earnings Decline
Persistent Systems: A profitability boost and strong order book
Persistent Systems delivered a 14% QoQ jump in net profit to ₹373 crore, continuing its AI-led and platform-driven services expansion.
| Metric | Q3 FY25 | Q3 FY24 | QoQ Change |
| Net profit | ₹373 crore | ₹325 crore | Up 14% |
| Revenue | ₹3,062 crore | ₹2,500 crore | Up 5.7% |
| EBIT | ₹456 crore | ₹407 crore | Up 12% |
| Interim dividend | ₹20 per share | – | – |
- Revenue in US dollar terms rose 5% QoQ to $360.2 million.
- Order booking at $594.1 million (Total Contract Value – TCV).
- EBIT margin improved by 90 bps QoQ to 14.9%, a positive indicator of operational efficiency.
Stock impact: Persistent Systems jumped over 9% to ₹6,200, with analysts raising the stock target to ₹7,600.
Also read: Zomato shares fall 9% on Blinkit’s expansion pressure in Q3 FY25
Why are Coforge and Persistent Systems surging?
1. IT industry momentum is picking up
The Nifty IT index surged over 2%, indicating renewed investor confidence in the sector.
- Mid-cap IT stocks outperformed large-cap IT players like TCS and Infosys.
- Companies like Cigniti Technologies and Zensar also gained 9-11%, highlighting the broader IT sector’s revival.
2. Strong order books signal long-term growth
Coforge’s $501 million in new deals and Persistent’s $594.1 million in TCV indicate steady demand for IT services, even amid global economic headwinds.
3. Positive brokerage outlook
Brokerages are bullish on both stocks, despite their premium valuations.
| Brokerage | Stock | Rating | Target Price (₹) |
| Nuvama Institutional Equities | Persistent | Buy | 7,000 |
| Motilal Oswal (MOFSL) | Persistent | Buy | 7,600 |
| ICICI Securities | Coforge | Buy | 9,500 |
| Lakshmishree Investment & Securities | Coforge | Buy | 10,500 |
Analysts believe Persistent’s 25% earnings CAGR from FY24-27 justifies its premium valuation of 50x FY26E PE.
Key trends to watch in the IT sector
1. AI and cloud computing remain dominant growth drivers
Persistent Systems is doubling down on AI-led platform services, while Coforge’s Xceltrait acquisition bolsters its cloud security capabilities.
2. Large-cap IT remains sluggish
While mid-cap IT firms are outperforming, large players like HCLTech lagged behind, slipping 0.6% in the session.
3. IT hiring and attrition trends improving
Coforge’s attrition rate stood at just 11.9%, among the lowest in the industry, indicating better workforce stability.
You may also read: IT industry posts strongest recovery in Q3 FY25 earnings
What’s next for Coforge and Persistent Systems?
Bull case scenario:
- If Coforge breaks past ₹9,100, it could rally to ₹10,000-₹10,500.
- Persistent’s FY31 $5 billion revenue target implies a 22.8% CAGR, setting it apart as one of the fastest-growing IT firms.
Bear case scenario:
- Global recession fears and tech spending cuts could slow revenue growth.
- High valuations may trigger profit booking in the near term.
Conclusion: Should you invest in these IT stocks?
Coforge and Persistent Systems are leading the mid-cap IT revival, backed by strong financials, large deal wins, and a bullish growth outlook.
- Long-term investors: May find Persistent appealing, given its aggressive growth targets.
- Traders: Can watch for Coforge’s breakout beyond ₹9,100 for short-term gains.
With the IT industry showing renewed strength, these stocks remain ones to watch in 2025. Will they continue their rally or face resistance ahead? Let us know what you think!
