Sonata Software Expects AI to Drive 20% Revenue in 3 Years
During the Q4 FY25 earnings call, Sonata Software CEO Samir Dhir showcased the firm’s high confidence in generative AI services. “We expect AI enabled services to contribute 20% of our revenue over the next three years,” he said. Dhir also added that the company is pursuing a $34 million pipeline in AI programs with over 100 clients. He also added that 97% of the workforce is trained with generative AI skills. Sonata reported a 19.4% year-on-year (YoY) increase in revenue from operations for Q4FY25 at ₹2,617.2 crore, even as net profit dipped 2.56% to ₹107.53 crore, reflecting the impact of client decision delays and paused deals in a volatile global environment. For the whole of FY25, revenue stood at ₹7,340.6 crores, reflecting a YoY growth of 23.4%. Quarterly revenue, however, fell 4% sequentially to ₹702.3 crore. In dollar terms, FY25 revenue stood at $335.5 million (up 3.7% YoY), while Q4 revenue declined 6.6% QoQ to $81.3 million. Despite the Q4 challenges, Sonata continues to see strong traction in AI with it being part of all deals. This has been a constant statement for most of the Indian IT firms who reported their quarterly results in April. Speaking on one of the largest deals that Sonata secured this quarter, Dhir said that AI was the differentiator. “In the TMT sector, we’re increasingly seen as an AI company,” he said, while adding that as clients double down on AI investments in areas like customer support, there is still increasing demand. Dhir said that AI adoption in software development is still in early stages—limited to testing and tools like GitHub Copilot. But Sonata expects it to deepen in the next 6 to 12 months, which might possibly affect the offerings of the firm to its clients. Security and compliance remain concerns, but the firm’s AI-led offerings, including agent-based frameworks, are already creating clear business value and winning deals. The company also acknowledged revenue conversion delays in Q4 due to global headwinds, including US tariffs impacting client IT budgets in retail and logistics. Despite this, the company added 14 new customers during the quarter. In the domestic products and services business, revenue surged 23.4% YoY to ₹7,340.6 crore in FY25. However, Q4 revenue dropped 9.1% QoQ to ₹1,918.2 crore. Annual gross contribution increased 14.8% to ₹299.1 crore, while Q4 contribution declined 4.3% to ₹78.4 crore. The company remains cautious for FY26 and did not give any guidance. Sonata Software just got added to the list of mid-sized IT firms outperforming their larger counterparts in Q4 FY25 in terms of quarterly growth and AI confidence. The firm has been investing in agentic AI for the last year and has clearly paid off this quarter.
CEO Samir Dhir said that the company is pursuing a $34 million pipeline in AI programs with over 100 clients.
CEO Samir Dhir said that the company is pursuing a $34 million pipeline in AI programs with over 100 clients.
["AI in finance"]
["Go", "agentic AI", "programming_languages:R", "AI", "RPA", "programming_languages:Go", "Git", "AI in finance", "generative AI", "GitHub", "R"]
["AI", "generative AI", "agentic AI", "R", "Go", "Git", "GitHub", "RPA", "programming_languages:R", "programming_languages:Go"]
Mohit writes about AI in simple, explainable, and often funny words. He's especially passionate about chatting with those building AI for Bharat, with the occasional detour into AGI.