Mid-tier Indian IT firms are outpacing their larger rivals on productivity, with Persistent Systems and Mphasis reporting 8.6 per cent and 6.2 per cent year-on-year gains in billable revenue per employee in the September quarter—driven by tighter utilisation, selective hiring, and AI-powered efficiency gains.
Within tier-I IT services majors, HCLTech has had the highest billable revenue per employee at $17,822 in Q2, growing 5.2 per cent YoY, according to estimates by market intelligence firm UnearthInsight.
Billable revenue per employee purely focuses on the tech teams delivering the projects, and excludes sales, support, HR, finance, legal, marketing and other functions. Revenue per employee measures how much income a company generates per worker.
Country’s largest software exporter, Tata Consultancy Services’ (TCS), estimated billable revenue per employee stood at $13,231 in Q2, growing only 0.4 per cent YoY despite its ongoing efforts to trim its global workforce. The company even lost around 19,755 employees sequentially in Q2FY26.
Infosys and Wipro saw a decline in in YoY billable revenue per employee, plunging 0.7 per cent and 4.9 per cent respectively. This is largely due to these companies restarting lateral and fresher hiring in FY26.
What Persistent, Mphasis are doing better?
According to analysts, Persistent and Mphasis’ better billable revenue per employee is an outcome of a mix of factors that involve improving on deal sizes and pricing while deploying artificial intelligence for higher productivity per employee.
“For every delivery headcount they had, they were able to generate more growth in the last one year. Also, Persistent’s revenue per employee has continued to grow despite adding headcount. This means they are adding more futuristic technologies like AI while growing the revenue as well,” explained Gaurav Vasu, founder and CEO, UnearthInsight.
He added, “Persistent had added non-linear headcount last year, and Mphasis is doing that as well. Persistent had also improved in deal sizes and pricing.”
Pareekh Jain, founder and CEO of EIIRTrend, said mid-tier firms are also gaining from higher subcontractor usage and greater flow-through revenue from third-party software and cloud components in large deals.
“Mid-tier IT firms rely more on subcontractors and flow-through revenues, which lift their revenue per headcount even though margins may not improve proportionally,” he said.
Jain added that this model, which has fewer freshers and more experienced staff, will continue until AI-led productivity gains start showing a larger impact across the industry.
Also read: H-1B visa curbs lift subcontracting costs for Indian IT firms; Infosys sees steepest rise
Why HCLTech is outperforming?
In the case of HCLTech, its smaller BPO (business process outsourcing) business as compared to peers TCS, Infosys and Wipro has worked in its favour. BPO businesses require more people but generate relatively lower revenue per employee.
“HCLTech doesn’t have a very large BPO business, their engineering services business is stronger. The lower your BPO business and India exposure, revenue per employee will be better. India business will have a very different billable revenue per employee numbers,” said Vasu.
He added, “For TCS, billable revenue per employee will also be lower as around 8-10 per cent of its business is from India, from government and group company projects. Similarly, Infosys and Wipro have significantly larger BPO practice as compared to HCLTech, that impacts revenue per employee.”
Also read: Why ‘revenue per employee’ misleads on profitability in Indian IT in the age of AI
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