Sonata's platformation strategy to provide IT services around IPs like Rezopia, Halosys, Brick & Click and Retina, is yielding results. Growth in IP-led revenues is improving employee productivity and aiding margin expansion. Microsoft Dynamic 365 is in growth phase and Sonata being a preferred development partner is reaping benefits. Sopris and Scalable Data will enhance Dynamics 365 offerings and will support growth. We expect IITS' USD revenue to grow 13.6/11.1% with margin of 23.4/24.0% in FY20/21E. We like Sonata's IP-focussed business model, high RoE (~35%) and dividend yield of ~4%. The stock trades at a P/E of 11.2x FY21E, which is reasonable. Risks include high client concentration, slow down in Dynamics 365 portfolio and drop in margins due to onsite investments. We maintain BUY on Sonata based on inline 1QFY20. IP-led strategy is driving growth for the past ten quarters (+10.3% CQGR) and is aiding margin expansion. We downgrade multiple to 14x from 16x to factor in growth moderation (ex IP-led) and high dependence on few clients. Our TP of Rs 421 is based on 14x June-21E EPS.