The shares of this midcap company jumped around 4 percent after receiving a multi-million dollar strategic IT outsourcing deal from a US-based premier Healthcare and Wellness company.
Price Movement:
With a market capitalization of Rs. 18,205 crores, the shares of Sonata Software Ltd started Thursday’s trading session on a higher note at Rs. 645.95 compared to its previous close of Rs. 624.50. During the trading session, the shares hit a high of Rs. 678.95, gaining around 4 percent and are currently at Rs. 648.80 apiece.
What Happened:
Such a positive movement in the share price was observed after the company in an exchange filing announced that it had been chosen as a strategic IT outsourcing partner by a US-based premier Healthcare and Wellness company.
As part of the collaboration, Sonata Software will assist the client in two key areas: first, enhancing IT budget management and cost efficiency through systematic improvements and engineering strategies.
Second, modernising their technology infrastructure by utilizing enterprise data, artificial intelligence, and hyper-automation across both patient-facing systems and back-office operations.
Additionally, the company emphasized that as part of its strategic five-year plan to reach USD 1.5 billion in annual revenue, Sonata Software has made focused investments in the Healthcare & Life Sciences (HLS) sector. These investments are already producing results, positioning HLS as one of Sonata’s fastest-growing business units.
Financials:
Looking at the company’s financial statements, the revenue jumped by around 16 percent from Rs. 2,192 crores during the March quarter to Rs. 2,527 crores in the June quarter. On the other hand, the net profits declined by around 4 percent from Rs. 110 crores to Rs. 106 crores during the same timeframe.
The company generates revenue from around the world, with 72 percent coming from the USA, 13 percent from Europe, and the remaining 15 percent from other regions.
Future Outlook:
The company aspires to become one of the fastest-growing firms in modernization engineering by leveraging the Platformation framework, with a revenue target of USD 1.5 billion by FY ’26 and an EBITDA in the low 20s.
Furthermore, Sonata Software anticipates that AI services will contribute 20 percent of its revenue over the next three years.
Important Financial Ratios:
In terms of key financial metrics, the company reported a Return on Equity (RoE) of 21.93 percent and a return on capital employed (RoCE) of 35.07 percent for the period spanning FY23-24. Further, the net profit margin stood at 3.58 percent during the same timeframe.
Company Profile:
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, Middle East, Australia and India.
Written By Vaibhav Patil
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