No longer discounted: Mid- and small-cap IT firms enjoy premium at bourses

The rally in mid- and small-cap stocks has spilled over into the IT sector as well. Second and third-tier IT stocks, which historically traded at a discount to the big five IT companies, are now trading at nearly 25 per cent premium to their large-cap peers.
 
The smaller IT companies have a price-to-earnings (P/E) multiple of nearly 38 times against the big five’s current P/E multiple of around 31x.
 
This is a contrast to last year, when mid- and small-cap IT companies traded at a P/E multiple of 13.3x at the end of March 2020, while large-caps had