Sonata Software - 3QFY17 Result Update - Unimpressive Show; IITS Revenue Disappoints - Reliance Securities

We like Sonata's differentiated business model, high dividend yield, quality balance sheet, high RoE and no equity dilution for over 15 years. However, the stock has risen 23%, surpassing our original target price since we initiated coverage in Dec'16. We believe the stock will remain subdued in the near-term given sharp up-move in the counter and subdued performance in 3QFY17. Hence, we downgrade our recommendation on the stock to HOLD from BUY with a marginally revised Target Price of Rs190 (from Rs185 earlier), as we partially roll over to FY19E.

Shares of SONATA SOFTWARE LTD. was last trading in BSE at Rs.196.75 as compared to the previous close of Rs. 190.9. The total number of shares traded during the day was 46337 in over 1175 trades.

The stock hit an intraday high of Rs. 198.8 and intraday low of 192. The net turnover during the day was Rs. 9100881.

Source : Equity Bulls

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