Sonata Software sees 10-12 week delay in pipeline to order conversion

Sonata Software is seeing a delay of around 10-12 weeks in closure of deals in the pipeline, the company's CFO, Jagannathan Chakravarthi, told CNBC-TV18 .

The company, which offers services such as cloud transformation, business intelligence, and application development management, is currently pursuing over 40 large deals accounting for around 48% of the total pipeline.

The deal pipeline in artificial intelligence (AI) is over $50 million across more than 90 clients and prospects, Chakravarthi said.

On March 18, the company signed a go-to-market partnership with Zones, a global provider of end-to-end IT solutions and cloud-managed services.

This five-year partnership between Zones and Sonata Software will support cost efficiency and data optimisation through joint offerings and delivery of industry-specific solutions, Sonata said in an exchange filing.

Headquartered in Bengaluru, India, Sonata has a strong global presence, including key regions US, UK, Europe, APAC, and ANZ.

Sonata Software aspires to achieve revenue of $1.5 billion by the end of FY26 at an international earnings before interest, taxes, depreciation, and amortization (EBITDA) level of low-20s. It also expects 20% of its revenue from AI services in the next 3 years.

In October-December 2023, Sonata Software’s revenue grew 30% to reach ₹2,493 crore. However, the earnings before interest, tax, depreciation, and amortisation (EBITDA) margin slipped to 8.2% from 10.3% QoQ. The company reported a loss of ₹46 crore compared to the profit of ₹124.2 crore in the previous quarter.

The current market capitalisation of the company is ₹20,741.62 crore.