Coforge vs Persistent vs Mphasis: Q1 FY27 Ranked

Mid-cap and small-cap Indian IT companies published their Q1 FY27 results in July — some beat market estimates while others missed. This post analyzes Coforge, Mphasis, Persistent Systems, Happiest Minds, and Newgen Software on their Q1 FY27 results and checks how these companies are prepared for the impact of AI, margin pressure, and slowing demand.

What Does Each Company Do?

Coforge is an IT services company focused on cloud, BPM, and data-related projects, with BFSI (around 26%), insurance, and travel & hospitality as its core verticals. It acquired Cigniti in 2023 and Encora in 2026, which is reflected in its 2026 revenue growth.

Persistent Systems is a product and digital engineering services company that builds and maintains software products for other companies, focused on software & emerging tech (around 40%), BFSI, and healthcare & life sciences. As a product engineering company, it commands a premium from customers.

Mphasis is an IT services company where application services form 75% and BPO and infrastructure form the remaining 25%. It is concentrated in BFSI (52% of revenue), insurance, and telecom.

Happiest Minds is a small digital engineering services company, focused on product and digital engineering (around 80%), infrastructure management and security (around 16%), and GenAI services. It works across BFSI, healthcare & life sciences, hi-tech & media, edtech, retail, CPG, and industrial.

Newgen is the only product company here. It sells NewgenONE — BPM, ECM, and CCM with AI agents — on a cloud and SaaS subscription model. It earns recurring revenue from software licenses, SaaS subscriptions, and support. Banking process automation is its largest vertical, followed by healthcare and government.

How Did They Perform in Q1 FY27?

Here is how the five companies stack up for the quarter ended June 30, 2026, sorted by market cap (descending).

Margin is the operating or EBITDA margin as disclosed by each company. Coforge revenue includes two months of Encora (US$100.7 Mn); excluding Encora, organic constant-currency growth was about 5% QoQ. Persistent figures are standalone because its parent entity bills a large share of consolidated revenue. Mphasis revenue is converted at the average Q1 FY27 USD/INR rate (US$471 Mn).

How Was FY26 for These Companies?

The annual reports for FY26 (year ended March 31, 2026) give the cleanest cross-company view.

Revenue Mix by Business and Vertical

Vertical groupings are as reported by each company in its annual report; Coforge's split is by service line, the others by industry vertical.

Revenue Mix by Geography

USA/Americas shown in blue, EMEA in orange, India in green, rest of world in grey.

Mphasis (84%) and Persistent (81.4%) are the most US-centric. Coforge (Americas 56.9%, EMEA 28.9%) and Newgen (India 29%, EMEA 31%, USA 23%, APAC 17%) are the most geographically diversified. Happiest Minds earns 59.3% from the USA, 17.6% from Europe, and 15.3% from India.

How Expensive Are These Stocks?

Prices as of August 2026 (NSE close). P/E is based on FY26 reported EPS; P/B on latest book value. ROE is FY26 from the annual reports.

---

What Do the Charts Say?

Persistent Systems

Persistent has a market cap of around ₹87,000 crore. Promoter holding is 30.29%, and promoters have held their stake consistently. FIIs reduced their stake by about 4 percentage points, while DIIs increased by around 3 points. The stock is trading near its immediate resistance of ₹5,500 and has risen around 20% in the last two months. The weekly RSI is 55.62. The P/E has come down over the last two years but remains at a premium. The TradingView analyst one-year target is ₹5,456, and the stock is already above it.

Coforge

Coforge has a market cap of around ₹80,000 crore. Both FIIs and DIIs have been reducing their stakes over the last two years — from June 2025 to June 2026, FIIs reduced by more than 10 percentage points and DIIs by a similar amount. Despite this selling, the stock has risen from its 52-week low of ₹1,008 to ₹1,802. The weekly RSI is 67.32, and the stock is near its immediate resistance of ₹2,000. The TradingView analyst one-year target is ₹1,877. It trades at a premium P/E compared to Mphasis, Newgen, and Happiest Minds.

Mphasis

Mphasis has a market cap of around ₹48,250 crore. Promoter holding is 30.50%, but promoters have reduced their stake over the last three years — by around 10 percentage points from June 2025 to June 2026. FIIs and DIIs have absorbed the promoter selling, which is a positive sign. The stock is trading above its immediate resistance of ₹2,500 with a bullish trend toward ₹3,000. The weekly RSI is 58. The P/E has come down over the last two years and is at a fair level. The TradingView analyst one-year target is ₹2,578, and the stock is already near it.

Newgen Software

Newgen is a small-cap company with a market cap of around ₹7,600 crore. Promoter holding is 53.45%. FIIs have reduced their stake by around 6 percentage points and DIIs by around 1.5 points. The stock dropped from ₹1,800 to ₹400 within one year, then recovered to ₹600 in less than six months — extremely volatile even for a small-cap. The weekly RSI is around 48.80. The P/E has come down over the last two years and is at a fair level. The TradingView analyst one-year target is ₹625, about 16.7% above the current price.

Happiest Minds

Happiest Minds is a small-cap IT company with a market cap of around ₹6,000 crore. Promoter holding is 44.21% and has been stable from June 2025 to June 2026 after declining in prior years. FIIs increased their stake by about 0.5 percentage points, but DIIs reduced theirs by around 5 points. The stock is consolidating above ₹400 after a multi-year downtrend from its COVID-era highs. The weekly RSI is around 49.77. The P/E has dropped significantly and is now at a fair level. The TradingView analyst one-year target is ₹449, about 15% above the current price.

Where Is Institutional Money Going?

The chart below shows how much FIIs and DIIs increased or reduced their stakes (in percentage points) between June 2025 and June 2026.

Coforge saw the sharpest institutional selling — FIIs cut by 13.1 percentage points and DIIs by 9.7 points. Newgen also saw FII exits (down 5.4 points). In contrast, Mphasis saw strong DII buying (+8.8 points) that absorbed promoter selling, and Persistent saw DIIs add +2.5 points against FII selling. Happiest Minds saw a small FII increase but a 4.9-point DII reduction.

---

Why Newgen and Happiest Minds Crashed and Have Not Recovered

Newgen's stock peaked in 2024 on Gen AI and agentic AI hype, and the P/E rose to near 50 — not sustainable without matching fundamentals. FY26 revenue growth was only around 6%, the slowest ever, and increased labor costs plus a legal provision hit Q4 FY26 PAT significantly. Q1 FY27 was better but not enough to support a high-growth valuation.

Happiest Minds followed a similar pattern. After listing in 2020 at ₹166, the stock rose to ₹1,400 during COVID as digital demand surged and IT was the only sector hiring. The P/E crossed 100 — not sustainable for a medium-growth IT company. The stock fell due to a valuation re-rating, not a business collapse.

Why Coforge and Persistent Did Not Fall Like Large-Cap IT

Coforge grew Q1 FY27 revenue by over 49% YoY (FY26: over 35%), while Persistent grew over 26% YoY (FY26: over 23%). In the same period, large-cap IT companies like TCS and Infosys grew only around 14%, with forward guidance of just 1% to 3%. Their growth comes from niche demand and acquisitions, not legacy maintenance work. Both stocks are down around 10% from their highs but have not corrected as sharply as Newgen or Happiest Minds. To justify their current valuations, they need to sustain this growth — if it slows, the market can re-rate them as well.

What Is the AI Risk for These Companies?

The core challenge for all these companies is AI adoption. The same force repriced large-cap IT and crashed IBM 25% in a day; whether the spending behind it is sustainable is the question we examine in is AI a bubble. They use AI to improve workforce efficiency, not to build AI products. Their solutions are built on top of OpenAI, Anthropic, and other providers. If these providers raise prices, the companies have to pass the cost to customers. If they increase efficiency through AI, they need more projects to fill the capacity freed up — otherwise, they get squeezed from both sides: rising AI costs and idle employee costs. If new projects do not come fast enough, they have to absorb the employee cost or cut headcount to protect PAT.

The advantage of mid and small-cap companies is that they can shift direction faster, and that agility shows up in their results compared to large caps. However, limited cash flow means a few bad decisions can derail growth quickly.

---

References

1. Coforge Q1 FY27 Investor Presentation — BSE
2. Persistent Systems Q1 FY27 Results — BSE
3. Mphasis Q1 FY27 Results — BSE
4. Newgen Software Q1 FY27 Results — BSE
5. Happiest Minds Q1 FY27 Results — BSE
6. Screener.in — IT Stocks Peer Comparison

All financial data sourced from FY26 annual reports and Q1 FY27 results. Shareholding data from company disclosures (June 2025 and June 2026). Stock prices, RSI, and analyst targets from NSE / TradingView (August 2026).

This analysis is for educational purposes only and does not constitute investment advice.