Clients investing in AI-enabled transformation to drive productivity: Sonata Software CEO

While AI may create some pricing pressure in commoditised services, it is simultaneously expanding the overall opportunity landscape, he added.

Bengaluru: Artificial Intelligence-led productivity improvements are expected to influence pricing dynamics in certain parts of the IT services industry, particularly in traditional effort-based delivery models, where automation can materially improve efficiency and speed, Rajsekhar Datta Roy, Chief Executive Officer at Sonata Software, told DH. However, he believes that the industry is fundamentally evolving toward a value- and outcome-led model driven by enterprise modernisation agendas.

"Clients today are increasingly investing in AI-enabled transformation to drive productivity, cost optimisation, workflow automation, and legacy modernisation," Roy said.

While AI may create some pricing pressure in commoditised services, it is simultaneously expanding the overall opportunity landscape across modernisation, data platforms, AI enablement, and intelligent workflow transformation. Companies that successfully move up the value-chain and deliver measurable business outcomes will be well-positioned to drive sustainable growth and stronger client impact, he added.

The Bengaluru-based mid-tier IT services company in the fourth quarter ended March 2026 posted Rs 130 crore in net profit, up 21.4 per cent YoY, compared to the year-ago period. Its consolidated revenues from operations declined by 3.1 per cent to Rs 2,536 crore, compared to Rs 2,617 crore in the same quarter last year.

When asked about the reasons for the decline, the CEO said FY26 was impacted by a combination of macroeconomic uncertainty, client-specific ramp-downs in two accounts, and certain seasonal factors that affected revenue growth during the year. "However, despite these headwinds, Sonata demonstrated resilience both operationally and financially. Our International business continued to perform steadily outside of these specific accounts, supported by healthy large-deal momentum and continued client engagement across transformation programmes. Operationally, the business remained disciplined, with EBITDA improving by 1.5 per cent YoY and PAT growing 18.7 per cent for the full year," he said.

The CEO said, despite a challenging macroeconomic environment marked by cautious enterprise spending and account-level ramp-downs, the company displayed a resilient performance by growing PAT 18.7 per cent YoY for international and 9.3 per cent for consolidated business FY26 YoY.

The company continues to see strong long-term commitment from clients toward technology modernisation and AI-led transformation initiatives. While discretionary spending remains measured in the near term, the strategic imperative around cloud modernisation, data platforms, automation, and AI-driven productivity enhancement remains firmly intact, he added.

"As we enter FY27, the momentum from large deals, combined with a healthy transformation-led pipeline, gives us confidence in our ability to navigate near-term uncertainties, while remaining well-positioned for long-term growth," he further said.

Large deals contribute 43 per cent of the company's active pipeline. Its AI-led pipeline today stands at about $335 million, while Cloud and Data together account for nearly 57 per cent of the overall pipeline.

The company continues to see strong growth opportunities across TMT (Technology, Media & Telecom), HLS ( Healthcare & Life Sciences), and BFSI ( Banking, Financial Services & Insurance). As far as hiring in FY27 is concerned, it will remain calibrated and aligned with business demand, "while ensuring that we continue to invest ahead in strategic growth areas".

"We continue to see strong demand for talent across AI and GenAI, cloud, data, and digital engineering capabilities. Alongside lateral hiring, we are also significantly investing in reskilling and upskilling our existing workforce to align with evolving client requirements and frontier technologies. We also remain committed to campus engagement and internship programmes, particularly in AI-allied and digital technology areas, as part of building a future-ready talent pipeline," Roy said.