Medium sized IT companies have grown despite the pressures of an economic downturn. Similar to their larger peers, most midcap IT companies have delivered sequential growth and are cautiously optimistic about the future, reports Kritika Saxena.

It's not just the big boys, even mid-cap IT firms are reaping the benefits of a recovery in the economy with clients increasing IT spends and the pricing environment stabilising.

Krishnakumar Natrajan, President and CEO, MindTree, says, "The quarter has certainly been a good quarter for us. We have had a 5% quarter-on-quarter growth. After there quarters of sequential decline, we have really seen the first positive sign in the market moving up."

While the performance compared to last year has dipped for most, sequential performance has seen a rise. MindTree has seen its revenue grow by 3.4% at Rs 315 crore while net profit grow by 33.8% at Rs 49.88 crore.

Hexaware's revenues grew by 1.6% at Rs 263 crore while net profit grew by 4.7% at Rs 41 crore. Patni's saw revenues grow by 3.3% at Rs 804 crore while net profit was up 24.5% at Rs 171.5 crore.

Jeya Kumar, CEO, Patni, says, "We grew 3.3% QoQ and were slightly ahead of guidance. We feel very comfortable at that level. I think this is the second quarter that we are growing above 3%. We are seeing a lot of deals coming in and customers are becoming more confident in terms of releasing projects." 

Pure play, BPO firm Firstsource Solutions has seen an increase in revenues by 0.8% at Rs 484 crore and a dip of 23.6% in net profit at Rs 29 crore. For most firms, the pressure is on maintaining margins in the coming quarter.

Ananda Mukherjee, CEO, Firstsource Solutions, says, "We believe that we are getting back to margin levels before the downturn started. Next quarter, we should see a little dip in margins because of the seasonality factor because Q3 is is seasonally a low quarter."

With stability in pricing, things may be looking better but these mid-tier IT firms are still cautious about the coming quarter.