Sonata Software Hits High, Shares Rise 44% Since Year Start

Shares of Sonata Software hit a 52-week high after the company teamed up with the Mumbai Indians to host the T20 women's league.

Sonata Software shares hit a new high of Rs 809, rallying 5% on the BSE in Thursday’s intraday trade on a robust dollar revenue growth outlook.

In the calendar year, information technology (IT) stock has risen 44% compared to a 3.4% decline in the S&P BSE Sensex. At 9:52 am, it quoted 3% higher at Rs 796.40, against a 0.56% fall in the benchmark index.

Sonata Software shares soared 27% in the past month after the company stated a solid financial performance for Q3FY23. Sonata’s IT services dollar revenues grew 4.7% quarter-on-quarter (QoQ) and 3.9% in constant currency (CC) terms, while revenue came in at Rs 489.6 crore, up 6.3% QoQ and 23.9% year-on-year (YoY).

Ebitda margins in IT services fell 70 bps QoQ to 25.2% due to raised employee costs and enlarged marketing spending in Q3. After-tax, the company’s consolidated profit soared 20% YoY and 4% QoQ at Rs 117.60 crore.

Sonata offers IT services at 30% and product licensing & deployment at 70%. The company delivers IT services to travel, retail, agro & commodities, manufacturing, and software sellers. The company is net debt free, having a healthy double-digit return ratio, RoCE of over 30%.

On February 22, Sonata’s wholly-owned US secondary contracted a definitive agreement to obtain a 100% stake in US-based Quant Systems (QS) for an entire reflection of $160 million (4.3 times sales), $65 million to be waged upfront while the rest $95 million paid in 2 years on certain milestones.

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