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Sonata Software Limited
(SONATSOFTW)
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Rating:70Outperform
Price Target:
₹380.00
▲(31.88% Upside)
Action:Upgraded
Date:07/14/26
Overall score reflects solid financial performance with strong revenue growth but pressured margins and inconsistent cash-flow conversion as the main constraint. Technicals add support due to a clear uptrend and positive momentum, while valuation is reasonable (moderate P/E and a supportive dividend yield) but not compelling enough to fully offset the fundamental watch-outs.
Positive Factors
Diversified services and recurring revenue streams
A multi-pronged services model (consulting, systems integration, managed services, cloud/data transformation and platform work) creates recurring and contract-backed revenue. This mix supports steadier revenue visibility, customer stickiness, and services pull-through over multi-year engagements.
Negative Factors
Meaningful margin compression since 2024
Sustained margin erosion reduces profitability leverage from revenue growth and limits internal funding for R&D or pricing flexibility. If driven by structural cost inflation or adverse mix shifts, compressed margins could persist and amplify sensitivity to demand slowdowns.
Read all positive and negative factors
Positive Factors
Negative Factors
Diversified services and recurring revenue streams
A multi-pronged services model (consulting, systems integration, managed services, cloud/data transformation and platform work) creates recurring and contract-backed revenue. This mix supports steadier revenue visibility, customer stickiness, and services pull-through over multi-year engagements.
Read all positive factors
Sonata Software Limited (SONATSOFTW) vs. iShares MSCI India ETF (INDA)
Market Cap
₹79.96B
Dividend Yield2.79%
Average Volume (3M)139.76K
Price to Earnings (P/E)17.1
Beta (1Y)1.95
Revenue Growth3.97%
EPS Growth8.32%
CountryIN
Employees5,948
SectorGeneral
Sector StrengthN/A
IndustryInformation Technology Services
Share Statistics
EPS (TTM)16.71
Shares Outstanding280,424,800
10 Day Avg. Volume73,947
30 Day Avg. Volume139,764
Financial Highlights & Ratios
PEG Ratio1.33
Price to Book (P/B)3.05
Price to Sales (P/S)0.54
P/FCF Ratio14.73
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)18.22
Revenue Forecast (FY)₹112.51B
Sonata Software Limited Business Overview & Revenue Model
Company Description
Sonata Software Limited, along with its subsidiaries, delivers a broad spectrum of information technology services and specialized solutions across a global footprint, serving clients in India, the United States, Europe, the Middle East, and Austr...
How the Company Makes Money
Sonata Software makes money primarily by selling IT services and technology solutions to enterprise customers under commercial contracts. Key revenue streams typically include: (1) Services revenue from consulting and project-based work (e.g., sys...
Sonata Software Limited Financial Statement Overview
Summary
Income Statement
74
Positive
Balance Sheet
72
Positive
Cash Flow
58
Neutral
| Breakdown | TTM | Mar 2026 | Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 110.15B | 107.01B | 101.57B | 86.13B | 74.49B | 55.53B |
| Gross Profit | 12.55B | 12.36B | 13.25B | 15.30B | 10.60B | 8.41B |
| EBITDA | 6.74B | 6.44B | 6.89B | 6.77B | 6.71B | 5.64B |
| Net Income | 4.63B | 4.64B | 4.25B | 3.08B | 4.52B | 3.76B |
Balance Sheet | ||||||
| Total Assets | 0.00 | 50.91B | 47.55B | 51.49B | 43.57B | 25.55B |
| Cash, Cash Equivalents and Short-Term Investments | 5.79B | 6.04B | 6.95B | 11.38B | 9.30B | 8.96B |
| Total Debt | 0.00 | 7.23B | 5.16B | 7.65B | 5.91B | 1.59B |
| Total Liabilities | -19.05B | 31.87B | 30.49B | 37.43B | 30.56B | 14.56B |
| Stockholders Equity | 19.05B | 19.05B | 17.06B | 14.06B | 13.01B | 10.99B |
Cash Flow | ||||||
| Free Cash Flow | -222.40M | 3.95B | 5.76B | 2.55B | 2.27B | 4.41B |
| Operating Cash Flow | 366.30M | 5.08B | 6.44B | 2.81B | 2.68B | 4.50B |
| Investing Cash Flow | -776.70M | -2.25B | -4.36B | -543.10M | -8.55B | -834.70M |
| Financing Cash Flow | -807.00M | -2.29B | -4.33B | -1.08B | 1.87B | -2.71B |
Sonata Software Limited Peers Comparison
UnderperformOutperform
Sector (55)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | ₹104.98B | 13.50 | ― | 3.31% | 8.06% | 15.25% | |
75 Outperform | ₹892.08B | 45.91 | ― | 0.32% | 25.39% | 25.32% | |
73 Outperform | ₹54.90B | 13.10 | ― | 1.42% | 6.64% | 5.07% | |
70 Outperform | ₹79.96B | 17.06 | ― | 2.79% | 3.97% | 8.32% | |
67 Neutral | ₹80.92B | 14.11 | ― | 2.30% | 1.35% | 20.25% | |
62 Neutral | ₹53.96B | 23.84 | ― | 1.87% | 11.50% | 16.69% | |
55 Neutral | $6.65B | 3.83 | -15.92% | 6.20% | 10.91% | 7.18% |
* General Sector Average
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Sonata Software Limited Corporate Events
Sonata Software’s 31st AGM Resolutions Pass via Virtual E-Voting
Aug 1, 2026
Sonata Software Limited held its 31st Annual General Meeting on July 31, 2026, via video conferencing and other audio-visual means, reflecting continued reliance on virtual formats permitted by MCA and SEBI circulars. The company engaged National ...
Sonata Software Publishes Notices on Transfer of Unclaimed Shares to IEPF
Jun 3, 2026
Sonata Software Limited has published newspaper advertisements announcing the transfer of certain equity shares to the Investor Education and Protection Fund, in line with statutory requirements on unclaimed investor holdings. The notices, carried...
Sonata Software posts earnings call audio to bolster investor transparency
May 11, 2026
Sonata Software Limited has notified stock exchanges that the audio recording of its analysts and investors earnings call held on May 11, 2026 has been uploaded to the investor relations section of its website. The disclosure, made under SEBI list...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.