Four Midcap IT Stocks Report Mixed Q3FY26 Earnings with Revenue Beats and Margin Expansions

3 min read Updated on 23 Jan 2026, 08:27 AM

Reviewed by

Radhika SScanX News Team

AI Summary

Four midcap IT companies reported Q3FY26 results with mixed performance indicators. Coforge achieved 4.40% constant currency revenue growth and 30% YoY order book expansion but saw profit decline due to exceptional losses. Mphasis delivered steady 1.50% CC growth with strong deal pipeline and positive analyst ratings. Zensar Technologies expanded EBITDA margins to 17.40% despite revenue decline, while Cigniti Technologies demonstrated strong operational performance with 20% EBITDA margins and robust revenue growth.

*this image is generated using AI for illustrative purposes only.

Four midcap IT companies delivered mixed performance in their December quarter (Q3FY26) earnings, showcasing varying growth trajectories and operational efficiencies across the sector.

Coforge Delivers Revenue Beat Despite Profit Decline

Coforge reported strong operational metrics with constant currency revenue growth of 4.40%, surpassing estimates of 3.50%. The company's order book demonstrated robust momentum, growing 30% year-on-year, indicating healthy demand prospects.

Financial Metric:	Q3FY26 Performance	Estimates/Previous Period	Variance
CC Revenue Growth:	4.40%	3.50% (est.)	+0.90%
EBIT Margin:	13.40%	13.20% (est.)	+0.20%
Profit After Tax:	₹250.20 cr	₹376.00 cr (prev. qtr)	-33.50%
Order Book Growth:	30% YoY	-	Strong momentum

However, profit after tax declined significantly to ₹250.20 crore from ₹376.00 crore in the previous quarter, primarily due to exceptional losses of ₹147.60 crore. These exceptional costs comprised higher labour wage costs of ₹117.90 crore, cybersecurity-related expenses of ₹16.20 crore, and acquisition-related costs of ₹13.50 crore related to the Encora deal.

Mphasis Shows Steady Performance with Strong Deal Pipeline

Mphasis delivered largely in-line performance with constant currency revenue growth of 1.50%, matching analyst estimates. The company maintained healthy margins with EBIT margin at 15.20%, marginally ahead of expectations.

Performance Indicator:	Q3FY26 Results	Growth/Change
CC Revenue Growth:	1.50%	In-line with estimates
EBIT Margin:	15.20%	Ahead of expectations
New Deal TCV:	$428.00 million	-19% QoQ, +22% YoY
TTM Deal Wins:	-	Doubled YoY

Segment-wise performance showed mixed results, with BFSI leading growth at 3.70% sequentially and insurance expanding 8.30%. Conversely, TMT, logistics and other verticals experienced declines. Geographically, India and EMEA regions drove growth while the Americas posted modest gains.

Management provided positive guidance, indicating the March quarter is expected to be the strongest sequentially due to deal ramp-ups. They reiterated that FY26 growth will be meaningfully better than FY25, with momentum likely continuing into FY27.

Analyst Ratings and Price Targets

Brokerage firms maintained positive outlook on Mphasis:

Nomura: Neutral rating with ₹2,970.00 price target
HSBC: Buy rating with ₹3,350.00 price target, expecting double-digit revenue growth
Jefferies: Buy rating with ₹3,410.00 price target, forecasting 10% YoY CC CAGR over FY26-28

Zensar Technologies Achieves Margin Expansion

Zensar Technologies reported a margin-led performance despite revenue challenges. Constant currency revenue declined 1.30% sequentially, reflecting demand softness in the market.

Key Metric:	Q3FY26	Previous Quarter	Change
CC Revenue Growth:	-1.30% QoQ	-	Decline
EBITDA Margin:	17.40%	15.50%	+1.90%

Despite revenue headwinds, EBITDA margin expanded significantly to 17.40% from 15.50% in the previous quarter, driven by higher offshore mix and operational efficiencies. The company highlighted that nearly 20% of its current order book is AI-influenced, demonstrating its strategic transition towards an AI-native services model.

Cigniti Technologies Reports Strong Operational Performance

Cigniti Technologies delivered robust growth across key financial metrics in the December quarter, demonstrating strong operational leverage and cost management.

Financial Performance:	Q3FY26	Q3FY25	Growth
Consolidated Net Profit:	₹80.00 cr	₹63.60 cr	+25.80%
Revenue:	₹580.00 cr	₹510.00 cr	+13.70%
EBITDA:	₹115.00 cr	₹90.30 cr	+27.40%
EBITDA Margin:	~20.00%	~17.70%	+2.30%

The company's margin improvement to nearly 20% reflects enhanced cost control measures and effective operating leverage, positioning it well for sustained profitability growth.