The shares of this global leader in digital transformation solutions and IT services fell around 15.5 percent to Rs 538.90 per share after the company posted weak Q4 results.
Sonata Software Ltd is a small-cap stock with a market capitalization of Rs 15,423 crore. On Wednesday, At 11:50 a.m., the company’s shares were trading at Rs 551.20 apiece, down 13.52 percent.
In Q4FY24, Sonata Software Ltd rebounded strongly, posting a consolidated net profit of Rs 110 crores compared to a loss of Rs 46 crores in Q4FY23. Despite this positive turnaround, the company experienced a 12% decline in total revenue for the quarter, reaching Rs 2,192 crores as opposed to Rs 2,493 crores in the corresponding quarter of the previous year.
For the fiscal year 2023-24, Sonata Software Ltd reported a consolidated net profit of Rs 308 crores, marking a slight decline of 32% from Rs 452 crores in FY22-23. However, the company demonstrated robust growth in total revenue for the fiscal year, with a 15% increase to Rs 8,613 crores compared to Rs 7,449 crores in the preceding fiscal year, as per the company’s filing.
In the fiscal year 2024, the company achieved a ROCE of 28.8% and EPS of 17.35 per share. It recommended a Final Dividend of Rs. 4.40 per Equity share (440% on par value Re. 1) for the financial year ending on March 31st, 2024.
Additionally, the board apporved the merger of Encore I.T. Services Solutions Private Ltd (a wholly-owned subsidiary of the company) with the company. Moreover, board granted preliminary approval for the merger of Encore Software Services Inc, USA (a wholly-owned subsidiary of Sonata Software North America Inc, USA) with Sonata Software North America Inc, USA, also a wholly-owned subsidiary.
Sonata Software Ltd is primarily engaged in the business of providing Information Technology (IT) Services and Solutions to its various customers in the United States of America, Europe, the Middle East, Australia, and India.
In terms of geography, 70 percent of Sonata’s foreign IT services revenues came from the US, with Europe (including the UK) following at 14 percent, and the rest of the world contributing 16 percent.
In the fourth quarter, retail and manufacturing accounted for 35 percent of the company’s sales, followed by Telecom at 36 percent, BFSI at 14 percent, and Healthcare at 12 percent.
As per the latest shareholding pattern, the company’s promoters hold 28.17 percent, while Foreign Institutional investors hold a 13.94 percent stake and Domestic Institutional investors hold a 19.05 percent stake.
Sonata Software Ltd shares have declined 15% in the last six months and 27% in last 12 months.
Written by Omkar Chitnis
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