Over dependence on top clients by Indian IT midcaps worries analysts

Midcap IT companies, in the past, have suffered due to changes in client requirements, and hence analysts have been exercising caution

The dependency of the midsize Indian IT services companies on top clients for revenues can be their biggest vulnerability even as they continue to show steady growth and attract investor interest due to their differentiated service offerings.

In an average, top 10 clients account for about 50 per cent of the revenues at midcaps firms, unlike their large-cap peers who are dependent on their top 10 clients for about a fifth of their revenues.

As IT midcap stocks ride high, it has also created a lot of speculation around a potential bubble with analysts picking the midcaps' client concentration as