Midcap IT a Buy now? Why analysts favour Coforge, Mphasis over large-cap peers

India’s IT sector is set to report its Q1 earnings starting with Tata Consultancy Services on July 9. Large-cap tech companies continue to struggle with weak discretionary spending and growing pricing pressure from artificial intelligence-led productivity gains. But midcap IT firms such as Coforge and Mphasis have continued to outperform both large-cap IT stocks and the Nifty IT index.

Brokerage reports suggest that while the overall demand environment remains subdued, the growth gap between large-cap and mid-tier IT companies is likely to continue.