How does the SVB collapse pose challenges for Midcap IT names like Coforge, Mphasis

The SVB collapse and the subsequent fall seen in global banks may lead to some of the major banking clients rejigging their IT expenses. The BFSI segment which contributes nearly 30-35 percent of the total revenue of Indian IT services, is expected to face the cost-cutting brunt.

The spill-over impact of SVB is not yet felt in larger US banks which form bulk of the revenue for the Indian IT heavyweights like TCS, Infosys, HCL Tech and others. Midcap IT names though are exposed to names like Fifth Third Bank and First Republic Bank that have come under tremendous pressure in the last few sessions.

As per a brokerage note, Coforge has exposure to a regional bank like Fifth Third Bank, whose shares fell over 13.5 percent on Monday and have declined nearly 30 percent over the last week.