Shares of Sonata Software Ltd plummeted by over 13% after touching a day’s high of Rs 483.10 on 7th February, following the firm’s disclosure of a client ramp-down in a key vertical during Q3FY25, which is expected to impact revenue for Q4FY25.

Sonata Software faced an unplanned ramp-down and gave a one-time discount to a major hi-tech client in Q3FY25, leading to a decline in the TMT vertical.

The company expects a ‘full-quarter impact’ in Q4FY25 due to the ramp-down, projected to be a ‘de-growth’ quarter.

The ramp-down also impacted Q3FY25 margins, as EBITDA saw a negative effect partially due to the one-time discount.

A ‘ramp down’ refers to a gradual reduction in services or engagement with a client, potentially leading to contract termination.

The company’s Q3FY25 consolidated net profit fell 1.4% QoQ to Rs 105 crore, with international services profit declining by 8.4% to Rs 57 crore.

Consolidated EBITDA fell 7.8% QoQ to Rs 163.6 crore, and international services EBITDA dropped 16.9% QoQ to Rs 107 crore.

International services revenue grew 3.4% QoQ to Rs 731.7 crore, while the domestic business rose by 44.4% to Rs 2111 crore.

At 11:32 AM, the shares of Sonata Software were trading 12.05% lower at Rs 485.15 on NSE.

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