Mid-tier IT company Sonata Software has lined up aggressive plans for growth which includes acquisition as well as entering new verticals.

“Our aspiration is to get back to the growth in 2004-2008, which was around 50 per cent CAGR,” Mr B. Ramaswamy, President and Managing Director, told Business Line .

Mr Ramaswamy said Sonata which has itself been the target for acquisition, pointed out that the company's CAGR revenues slipped to 11 per cent in 2008-2009, but now it plans to again grow at a rate of 50 per cent in the next five years. Sonata's CAGR revenue stood at 60 per cent in 2007-2008. Over a five-year period, from the financial year 2004-2005 onwards, its CAGR revenue stood at 48 per cent.

Mr Ramaswamy, however, did not give a timeframe for the company to achieve the coveted $1-billion revenue mark. “Why do you need to be $1 billion? It is a good aspirational goal, but it can't be a point goal,” he said.

Discussing the revenue break-up, he said that Sonata currently gets around 40 per cent from the transport sector, while the outsourced products development contributes 37 per cent and enterprise services the remaining 23 per cent.

When asked about the dangers of exposing the company to just one or two critical sectors, he said, “We are a mid-tier company and cannot ape the tier-I companies. We need to focus on a few sectors to grow and need to depend on client stickiness.”

According to Mr Ramaswamy, in 2009-2010, around 77 per cent of the company's revenues came from customers who were clients of the company for over five years.

Regarding acquisitions of companies to enter new verticals, Mr Ramaswamy said that while there are no specific companies for acquisitions currently, Sonata was interested in inorganic growth and had the financial capacity to buy companies. “We are a debt-free company and have reserves of Rs 180 crore,” he pointed out.

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