Sonata Software aims for $1.5 bn revenue by FY26; focus on BFS, healthcare

"By FY26, we aim to grow our domestic business to $1 billion and international business to $0.5 billion," Dhir told Business Standard

Sonata Software is eyeing revenues of $1.5 billion in the next two-three years on the back of strong growth, both in its domestic and international businesses, a top company executive said.

The Bengaluru-based mid-sized IT firm’s domestic business, which includes products and managed services, contributed $685 million during 2022-23 (FY23). Its international business, which comprises IT services, generated revenues of $240.9 million during last financial year.

“By 2025-26 (FY26), we aim to take our domestic business to $1 billion and international business to $0.5 billion,” Samir Dhir, chief executive officer (CEO) and managing director (MD), Sonata Software, told Business Standard.

In terms of markets, Sonata will be focussing on North America, UK, Nordics, India, Singapore and Australia. Vertical-wise, the company laid out a strategy to focus on specific verticals.

“We will focus on banking and financial services (BFS) and healthcare and want to double down on these. Sonata has been traditionally very strong in retail, manufacturing, distribution and hi-tech verticals. So, those are our verticals of focus,” said Dhir.

From a technology solutions perspective, Sonata is primarily focussing on data and Cloud. “We want to help customers move from on-premise to Cloud, modernise their assets, upgrade their data platforms, automate them, and bring artificial intelligence (AI) significantly into them,” added Dhir.

As part of its investments in AI, Sonata recently launched Harmony.AI. It claims this is a “responsible-first” AI offering a range of industry solutions, service delivery platforms, and accelerators using generative AI (GenAI).

“We are beginning to see project activity on GenAI now…we have done one implementation already for a very large high-tech customer. And, it wanted to implement GenAI in its call centre and leverage the power of AI by its agents for the customers. So, it’s not a proof of concept but a real implementation. There are several such discussions happening with customers right now,” said Dhir.

Sonata has also established Harmoni.AI Academy, to train engineers on the ‘Responsible-First by Design’ approach. Around 20 per cent of its engineers are involved in AI initiatives to enable clients to leverage the potential of GenAI in a trusted, secure, and governed framework.

Sonata is also working towards strengthening its partner ecosystem. “We want to work with a few partners and build meaningful relationships, be it Microsoft, AWS, Salesforce, or Snowflake. We started expanding our footprint from a partner ecosystem perspective so that we can provide a wider set of services,” said Dhir.  

Sonata is eyeing large deals, which are spread over several years.

Earlier this year, the company signed its biggest-ever contract worth $160 million for 10 years with a US-based consumer retailer. It will manage the client’s end-to-end IT modernisation and transformation.

While acquisitions are not a core strategy for Sonata to achieve its growth targets, Dhir said it will opt for an acquisition if there is a right fit. In February this year, Sonata acquired Texas-based Quant Systems to accelerate its growth curve and build scale.

The acquisition is expected to accelerate Sonata’s capabilities in enterprise data analytics, Cloud modernisation, cyber security, and data privacy. It will expand Sonata’s domain expertise in banking, financial services and insurance, healthcare & life sciences, and consumer & retail, among others.