BENGALURU: Mid-tier IT firm Sonata Software targets to achieve revenue of $1.5 billion by the end of FY26 at an international EBITDA level of low-20s. In an interaction with TNIE, Jagannathan Chakravarthi, Chief Financial Officer, Sonata Software, said the company's goal remains to be one of the fastest growing Modernisation Engineering firms.
"From a growth perspective, we are betting big on a few pillars, which include winning multiple large deals consistently every quarter; over delivering on Mergers and Acquisitions; and winning new logos that can scale to be the next large account, leveraging our ecosystem of key partners like Microsoft, AWS, etc," he said.
He added that they will double down on four strategic verticals – Healthcare & Life Sciences; Banking, Financial Services and Insurance; Retail, Manufacturing; and Telecom, Media & Technology – and key geographies of North America, UK, Europe, India and Australia.
In the third quarter of this fiscal, the company's revenues stood at R 2,493 crore, sequential growth of 30%.
"Despite macro headwinds, this is the fifth consecutive quarter that Sonata Software has showcased industry-leading performance. Our EBITDA percentage of 22.6%, without forex and other income, reiterates resilient performance and profitable growth. We have reasons to believe that our guided EBITDA margin (Before forex and Other Income) will remain in the range of 20-22%. The variance, if any, would be based on our investment decisions every quarter," he added.
The company continues to remain optimistic about its long-term growth prospects. According to him, the impact of macroeconomic headwinds has been broad based.
While they are seeing some delays in decision making, the company's big bets and sustained investments continue to deliver great outcomes. Its orderbook and pipeline remain strong. In terms of sectors, Sonata’s Healthcare Life Sciences business forms 12% of its revenue, BFSI grew to about 18%. Its Modernisation Engineering focus bumped up revenue contribution from cloud and data from 45% to 59%.
The company continues to invest 1.5 to 2% of its revenue on future growth including Gen AI, Microsoft Fabric. As of now, the company is in the final stages of shaping its hiring plan for FY25. “Our preliminary outlook indicates a continuation of our commitment to campus hiring, with an estimated intake of around 600 new graduates for the upcoming year. Despite prevailing market uncertainties, our robust revenue plan, driven by a strong pipeline and order book, instils confidence in our growth trajectory,” Chakravarthi added.