BENGALURU: Bengaluru-based mid-tier IT company Sonata Software has announced plans to hire 700 freshers in the 2024-25 financial year. According to CFO Jagannathan CN, the company hired approximately 225 freshers in the first half of FY25.
For Q2 of FY25, Sonata's consolidated EBITDA was recorded at Rs 177.3 crore, while PAT stood at Rs 106.5 crore, showing a quarter-on-quarter growth of 0.8 per cent.
In the International IT services segment, however, the company reported a PAT of Rs 62.2 crore, reflecting a 4.5 per cent decrease quarter-on-quarter.
During its earnings announcement, the company highlighted certain headwinds impacting performance in Q2 and Q3 of FY25. These challenges stemmed partly from salary increments for mid- and senior-level managers, which caused a 1.1 per cent decrease in EBITDA for Q2 FY25.
Additionally, lower margins were observed due to large deals announced in Q1 FY25, which are expected to affect profitability across three to four quarters.
“These headwinds are being countered by operational improvements that had a positive impact of 60 basis points in Q2 FY25. As a result, our net impact at an international level was only 50 basis points in EBITDA before forex and other income,” said Jagannathan.
When discussing the macroeconomic environment and client spending for the latter half of FY25, the CFO noted that inflation in the United States is likely to persist for several more quarters. “Although the Federal Reserve has promised to reduce the interest rate by another 25 basis points before December 2024, we do not expect it to have a significant positive impact on customer spending in the near term. While the presidential election has alleviated political uncertainty, it is too early for us to comment on the impact of the change of guard in the US.”
Sonata's deal pipeline grew by 5 per cent quarter-on-quarter, with its AI-related deal pipeline increasing from 64 million to 67 million dollars in Q2 FY25. Additionally, the company's book-to-bill ratio remained steady at 1.23 times in Q2 FY25.
In terms of industry verticals, Sonata reported 30% quarter-on-quarter growth in the BFSI (Banking, Financial Services, and Insurance) sector in Q2 FY25. “This strong growth is driven by the large banking deal announced in Q1 FY25. We expect the momentum to continue in BFSI as well as in the Healthcare and Life Sciences (HLS) sectors over the coming quarters. Retail, however, remains soft, and we anticipate it will stay that way for a few more quarters given the ongoing inflation in the US,” Jagannathan added.