Shares of this multibagger small-cap IT stock jumped around 9 percent on Thursday after the company posted financial results for the quarter ended September 2023. In the past six months, the company gave more than 30 percent returns to its stakeholders.
With a market capitalization of Rs 15,895.18 crores, the stocks of Sonata Software Limited closed at Rs 1,133.65 on Thursday, zooming around 9 percent as compared to the previous close of Rs 1,042.40 apiece. The stock is trading near its 52-week high mark recorded at Rs 1,156.
Such sharp movements in the stock prices were observed after the company published the financial results for Q2FY23-24, viz, for the quarter ended September 2023.
The company, on a QoQ basis, reported an opposing movement as far as the operating revenues and after-tax profits are concerned.
The operating revenues, on one hand, declined from Rs 2,016 crores during Q1FY23-24 to Rs 1,913 crores during Q2FY23-24, and, the after-tax profits, on the other hand, moved up from Rs 120 crores to Rs 124 crores.
In addition to the above, yearly, the company has performed well with the operating revenues as well as after-tax profits increasing. The operating revenues went up from Rs 1,496 crores during Q2FY22-23 to Rs 1,913 crores during Q2FY23-24 representing an approximate jump of 30 percent, and, the after-tax profits, increased from Rs 113 crores to Rs 124 crores.
Keeping a purview of one year, the company’s stock has proven to deliver multibagger returns of 118 percent, i.e., if someone had invested Rs 1 lakh into the stock a year ago, it would have converted to Rs 2.18 lakhs.
Historically, the company has reported healthy numbers in the return on equity (RoE), i.e., growing from 37.65 percent during FY21-22 to 37.85 percent during FY22-23. In addition, the company, though increasing its debt levels, has kept the ratio below the desired levels and recently shifted from 0.03 times to 0.38 times keeping the timeframe the same,
According to the shareholding data available for the September 2023 quarter, the company’s Promoters hold a 28.17 percent stake, and the Foreign Institutional Investors (FIIs) hold a 14.98 percent stake in the company.
Sonata Software Limited is a technology company that is engaged in the business of software/hardware products and licenses. With a majority of revenue generated from India, the company caters to Independent Software Vendors (ISVs), travel & tourism, retail, etc.
Written by Amit Madnani
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