BENGALURU: Bengaluru-based mid-tier IT company Sonata Software’s Artificial Intelligence (AI) pipeline has increased from $60 million in the last quarter to $65 million in Q2FY25. In an interaction with TNIE, Jagannathan Chakravarthi, chief financial officer at Sonata Software, said the company’s responsible-first AI, Harmoni.AI, has been well-received by its customers.
“Over the next two to three years, we expect to reach 20% of our revenue from AI,” he said. “While large AI-based deals are yet to materialise, this quarter we have nine small- to medium-sized deals. We expect this trend to continue for another four to five quarters. During this time, we expect the technology to stabilise and customers to become more receptive to the benefits through its application,” he said.
The CFO added that the company’s investments in AI will pay off in the near future. In the first quarter of this fiscal, the company’s revenue grew by 1.3% and EBITDA improved by 140bps for international business.
The company’s goal is to achieve $1.5 billion revenue by FY26. In the first quarter, its consolidated revenue stood at Rs 2,527 crore, a 15% increase sequentially. Its PAT for Q1 stood at Rs 105.6 crore, de-growth of 4.3% sequentially.
“While our Q1 FY25 EBITDA for international and domestic business improved, increase in forex loss and tax costs (change in SEZ regulations) and increase in interest cost on loan, has brought down our PAT,” he explained.
On client spending, Chakravarthi said that they are experiencing decision delays in closing large deals. "However, this is more a market phenomenon given the macros in play. That said, we are observing mixed trends across different industry verticals," he added.
In the Technology, Media and Telecom (TMT) sector, the company is seeing positive momentum and green shoots. "The healthcare sector is also showing signs of recovery. We have a strong pipeline and order book that should support growth in the coming quarters. The BFSI segment is expected to bounce back in a couple of quarters," he said.
In this fiscal, the company will hire 650 people from the campus. Additionally, it will continue to recruit laterally to address attrition, support new projects, and fulfil specific technology needs.