You are here: Home » Companies » News
Business Standard

From Mphasis to Mindtree, mid-sized IT companies focus on fewer verticals

Companies such as Virtusa have good presence in the BFSI segment, NIIT Technologies has steadily built strong capabilities in aviation

Debasis Mohapatra  |  Bengaluru 

Mid-sized IT companies

in India are playing their cards carefully by not entering into every business segment like their larger peers. Instead, they are focusing on verticals in which they have deep domain expertise for executing projects.

A lower component of legacy business is also enabling them to be more agile in the digital space, which is helping them to grow their revenues faster.

"Most mid-sized IT firms are focusing on fewer verticals than playing the game across the spectrum. This enables them to compete with their larger peers, who enjoy certain economies of scale," said Pareekh Jain, senior vice-president and head of India operations at HfS Research.

For example, Mphasis, which is traditionally strong in banking, and (BFSI) space, is further building on that to cater to the digital needs of clients.

ALSO READ: Party in mid-cap IT stocks to continue: MindTree, Zensar gain of over 35%

is building strong capabilities in providing travel and hospitality solutions. is focussing on the manufacturing and segments.

Similarly, while such as Virtusa have good presence in the segment, has steadily built strong capabilities in aviation. Mumbai-headquartered is shifting its focus from a design aspect to providing a full spectrum user interface.

According to Rostow Ravanan, CEO of Bengaluru-headquartered mid-size IT services company Mindtree, the company does not want to get into newer verticals and instead will focus on existing ones to deliver better value proposition to clients.

ALSO READ: Mid-size IT firms stay ahead on niche focus

"Strategy is all about making choices. For us, whether it is financial resource or management resource; these are all limited. So is better served if I take my existing verticals like banking, retail, travel and high technology and go deeper into those verticals," Ravanan told Business Standard.


Apart from concentrating on a few verticals, these are also staying away from segments where larger players have a competitive advantage. For example, most mid-sized IT firms have consciously stayed away from the energy and utilities vertical, which of late is going through a challenging time owing to fluctuations in crude oil prices. Similarly, healthcare and telecom are the other verticals where these firms have a weaker presence.

ALSO READ: IT stocks outrun markets for three consecutive quarters; midcaps shine

With shrinking IT budgets and a shift towards spending in building digital capabilities, clients are choosing their outsourcing partners based on the latter's strength and domain expertise. While digital deals also tend to be smaller in size, mid-size IT firms are looking at this as an opportunity to work with clients in specific areas.

"Mid-sized IT firms are focusing on specialisation as they can afford to do so due to their size. But as they scale up, they have to re-evaluate their strategy and broad-base their offerings," said Siddharth Pai, a former outsourcing advisor and founder of Siana Capital, a venture fund management company.

Besides, the lower percentage of legacy business of mid-sized IT firms is helping them move faster in the digital space. "Mid-sized software services firms do not carry the burden of legacy business like their larger peers. This is enabling them to move faster in the digital space. Also, most of the mid-sized firms have gone out and acquired companies to build their digital capabilities in recent years," Jain of HfS Research said.

First Published: Wed, June 13 2018. 07:04 IST