Mid-tier IT firm Sonata Software has pushed its $1.5 billion revenue target by a year to fiscal 2027, its top executive told ET.
This indicates the slowdown in technology demand is also impacting mid-sized outsourcing firms which have been growing faster than their larger rivals like Tata Consultancy Services, Infosys, HCLTech, and Wipro.
“We have called out that we want to be $1.5 billion in revenue by FY27. That’s our long-term goal. Given the market condition, we diluted it (from an earlier target of achieving it by FY26 ending March 2026) by 2-4 quarters now,” managing director and chief executive Samir Dhir said.
The Bengaluru-headquartered IT services firm surpassed $1 billion in consolidated revenue in the last fiscal year ended March 31. In its June quarter investor presentation, the company said it expects to add $500 million to the revenue in three years.
For Q1, Sonata Software reported a 12% year-on-year and 4.3% sequential increase in net profit to Rs 105.6 crore. Revenue rose 25% YoY and 15.3% QoQ to Rs 2,527.4 crore. The performance was primarily driven by its domestic business.
“As the IT sector globally picks up, the IT companies will start to acquire more licenses, more products, etc., going forward, which will take another two to three quarters. By Q4 or Q1, we will see growth coming back in the IT and ITes segment as well,” he said.
Sonata generates over two-thirds of its revenue from domestic products licensing and related services and the remaining from international IT services across four major verticals: TMT (telecom, media, and technology), retail & CPG, manufacturing, BFSI (banking, financial services, and insurance), and HLS (healthcare and life sciences).
In the first quarter, the company won three large deals each in the medical & mental healthcare, manufacturing, and financial services sectors.
It aims to leverage the GenAI push with $64 million projects in the pipeline with a boost from hi-tech (TMT) and healthcare verticals.
According to Dhir, each industry is responding to different needs. The hi-tech is chasing the AI big vision, the healthcare segment is chasing cost containment and the banking sector is chasing consumer retention.
Despite the headwinds, Dhir expects Sonata Software to continue growing faster than the industry average, where large IT majors have guided revenue growth of around 5-7%. “We aspire to be a top quartile growth company,” he said.
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