Synopsis:- Reporting Q4 and full-year FY26 results, Sonata Software posted consolidated PAT growth of 25 percent quarter-on-quarter in Q4, with international EBITDA margins recovering to 20.2 percent, the strongest in recent quarters as utilisation hit 91.8 percent; the company also announced two large deal wins and declared a final dividend of 415 percent (₹4.15/share), while full-year PAT grew 9.3 percent year-on-year against subdued international revenue growth of around 1 percent in constant currency.
With a market capitalisation of Rs. 8,175.79 crore, the shares of Sonata Software Limited were last recorded at Rs. 291.55 per share, up 7.56 percent from its previous close of Rs.271.05. It is trading at a P/E of 17.61.
The fourth quarter brought a meaningful earnings recovery, though the revenue picture remained mixed. Consolidated PAT for Q4 FY26 grew 25 percent quarter-on-quarter over Q3 FY26’s Rs. 104 crore, implying a Q4 profit of approximately Rs. 130 crore and a roughly 20 percent year-on-year improvement over Q4 FY25’s Rs. 108 crore. International EBITDA expanded 0.7 percent sequentially.
On the domestic business front, revenues for Q4 FY26 were Rs. 1,759 crore, down 25 percent from Q3 FY26’s Rs. 2,346 crore, a decline that is seasonally familiar for Sonata’s distribution-heavy SITL segment, where Q3 typically peaks ahead of enterprise procurement cycles closing out the calendar year.
International services revenue in Q4 FY26 grew 0.6 percent in constant currency terms and 1.3 percent in reported rupee terms year-on-year, essentially flat. The revenue growth narrative at Sonata’s international IT arm remains subdued, making the margin and utilisation recovery the more constructive story for the quarter.
FY26 Results
For the full year FY26, consolidated PAT grew 9.3 percent year-on-year from Rs. 425 crore in FY25. Full-year consolidated revenue is estimated at approximately Rs. 10,600-10,650 crore, compared to Rs. 10,157 crore in FY25, a roughly 5 percent increase. The modest top-line growth rate reflects three converging pressures: a still-cautious international IT spending environment, competitive intensity in the Microsoft Dynamics-adjacent space, and
a domestic technology distribution business that is broadly stable rather than scaling at pace. In that context, the 9.3 percent PAT growth reflects genuine operational improvement driven primarily by margin expansion in the international segment rather than volume.The board recommended a final dividend of 415 percent on a face value of Re. 1 per share, amounting to Rs. 4.15 per share for FY26.
The most consequential development in the Q4 results was the recovery in international services profitability. International EBITDA margin reached 20.2 percent in Q4 FY26, compared to 16.3 percent in Q4 FY25, an 820-basis-point year-on-year expansion. RONW for the international business reached 30.3 percent, up from 19.3 percent a year ago. Utilisation improved sharply across the year, from 87.0 percent in Q4 FY25 to 91.8 percent in Q4 FY26.
This margin recovery points to two things: headcount rationalisation that took effect in FY25 being absorbed into a leaner base, and a gradual shift in revenue mix toward higher-margin Cloud and Data work. Cloud and Data as a proportion of international revenue grew from 47 percent in FY24 to 53 percent in FY26, a 13-percentage-point mix shift in two years reducing dependence on lower-margin Dynamics reselling and legacy managed services.
Business Overview
Sonata Software Limited is a Bengaluru-headquartered IT services and solutions company, incorporated in 1994. The company operates through two main segments: International IT Services (ITS), focused on modernisation engineering for clients across the US, Europe, and other markets; and SITL, its India-based technology distribution and domestic IT services arm.
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