Sonata Software Ltd. share price target

revenue & Sonata continues to gain market share in it & we believe Sonata will grow at Revenue & EPS CAGR of 23% & 35.5% from FY21-23, it trades at 19.5X FY23 earnings with ~4.5% FCF yield which we find attractive. Miss in IITS revenue, +1.6% QoQ USD (Ple: 4%) was due to supply side issues...

Robust hiring trend and inorganic growth prompt us to build IT service dollar revenue growth of 23.4% CAGR over FY21-23E Alternate Stock Idea: Apart from Sonata, in our IT coverage we also like Mastek. Growth in new logo acquisition, increasing deal size, expansion of sales &...

IT services segmental EBITDA margin sustained at 28.4% despite wage hike led by record high offshoring, sustained high utilization and revenue leverage. Sonata reported strong beat in IT services revenue with growth of 6.8% QoQ USD (Ple: 4%) driven by digital based competencies like Managed cloud services (12.3% QoQ USD) and Digital Platformation Services - Microsoft (9.2% QoQ USD) & Open source (12.3% QoQ USD) and focused verticals like ISV (9.3% QoQ USD), Distribution and Manufacturing (11.8% QoQ USD)....

Sonata Software reported Q4FY21 numbers. IT service segment dollar revenues increased 7.3% QoQ to US$44 million (| 319 crore) mainly led by healthy growth across geographies. IT service EBITDA margin declined 58 bps QoQ to 28.4%. Domestic revenues declined 30.7% QoQ to | 761.5 crore but EBITDA margin increased 169 bps QoQ to 4.2%. Hence, overall revenues declined 22.8% QoQ to | 1,080.5 crore and EBITDA margin increased 317 bps QoQ to 11.4%. Overall PAT increased 54.4% QoQ to | 83.1 crore due to absence one-time settlement of taxation and higher other income. Sonata...

Sonata Software reported 5.1% QoQ growth in dollar revenues (US$41 million) in IT services segment mainly led by healthy growth across geographies. IT service EBITDA margin improved 451 bps QoQ to 28.9%. Domestic revenues increased 110% QoQ to | 1099.4 crore and EBITDA margin declined 126 bps QoQ to 2.5%. Hence, overall revenues increased 74% QoQ to | 1,396 crore and EBITDA margin declined 297 bps QoQ to 8.2%. Overall PAT declined 6% QoQ to | 53.8 crore due to one-time...

The travel vertical contribution to revenues declined from 22% in Q4FY20 to 4% in Q1FY21 mainly due to its exposure to top client (~20% of revenues), which is in the travel vertical from European region. The company expects a gradual improvement in revenues from top client from Q2FY21E onwards and expects its contribution to improve from current ~3% of topline to ~10% of topline by Q4FY20E. Further, we expect other verticals like Independent Software Vendor (ISV), essential retail, utility and commodity service to improve in coming quarters. However, considering the significant...

Sonata Software reported poor Q4FY20 results. IT service revenues in dollar terms fell 5.1% QoQ mainly due to Covid-19 pandemic and its exposure to impacted vertical like travel (down 12.7% QoQ, accounts for 23% of revenues) & retail (down 5.1% QoQ, accounts for 28% of revenues). IT service EBITDA margin also declined ~560 bps QoQ while PAT declined 22% QoQ. Overall revenues declined 25% QoQ mainly led by 33% decline in domestic product business. Overall PAT declined 19% QoQ to | 61.8 crore, mainly led by 22% QoQ decline in IT service revenues and one-time...

The spread of Covid-19 has led to lockdowns in many countries globally and could have adverse economic implications. In addition, the recent fall in crude prices could also have an adverse impact of fiscal health of oil producing countries. As a result, IT companies, which have considerable exposure to verticals such as oil, energy & utilities; banking & capital markets; manufacturing and travel & transport could see an adverse impact from the ongoing crisis. Companies like Wipro, Infosys in large cap and MindTree, NIIT Tech, Sonata software, Cyient, Accelya Solutions among...

The spread of Covid-19 has led to lockdowns in many countries globally and could have adverse economic implications. In addition, the recent fall in crude prices could also have an adverse impact of fiscal health of oil producing countries. As a result, IT companies, which have considerable exposure to verticals such as oil, energy & utilities; banking & capital markets; manufacturing and travel & transport could see an adverse impact from the ongoing crisis. Companies like Wipro, Infosys in large cap and MindTree, NIIT Tech, Sonata software, Cyient, Accelya Solutions among...