Sonata Software Navigates Market Turbulence as AI Adoption Grows

Indian IT firm faces revenue pressures while betting big on artificial intelligence solutions

Mid-sized IT services provider Sonata Software reported mixed financial results this week, revealing how global economic uncertainties are impacting India's technology sector. The Bangalore-based company saw its fourth-quarter net profit dip 2.56% year-over-year to ₹107.53 crore ($13 million), despite a 19.4% increase in overall revenue.

Chief Financial Officer Jagannathan CN explained the challenges: "Client decision cycles have lengthened significantly, especially in retail and logistics sectors affected by recent U.S. tariff changes." The company noted particular pressure in its international IT services division, where quarterly revenue declined 4% sequentially.

However, silver linings emerge in Sonata's growing artificial intelligence business. "AI components now feature in nearly every client engagement," Jagannathan told Financial Express. The company is focusing on cost-saving AI implementations that resonate with budget-conscious enterprises.

While avoiding specific growth forecasts, Sonata remains optimistic about its competitive position. "Our agility gives us an edge in adopting new technologies faster than larger competitors," the CFO noted. The firm continues hiring aggressively, with plans to onboard 650-700 fresh graduates this fiscal year.

As global enterprises recalibrate tech spending, Sonata appears positioned to weather the storm through its dual focus on AI innovation and operational efficiency. The company's next moves may signal how India's vital IT sector adapts to evolving market realities.