Q4FY21 Company Update - Sonata Software - ICICI Direct

Sonata Software reported Q4FY21 numbers. IT service segment dollar revenues increased 7.3% QoQ to US$44 million (Rs. 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 Rs. 761.5 crore but EBITDA margin increased 169 bps QoQ to 4.2%. Hence, overall revenues declined 22.8% QoQ to Rs. 1,080.5 crore and EBITDA margin increased 317 bps QoQ to 11.4%. Overall PAT increased 54.4% QoQ to Rs. 83.1 crore due to absence one-time settlement of taxation and higher other income. Sonata has declared a dividend of Rs. 10/share.

Valuation & Outlook

The company expects its travel client to witness improved demand in H2FY22E. In addition, expansion in commodities vertical (led by Scalable IP), upgrades in Microsoft Dynamics, traction in ISV vertical and retail are expected to drive revenues. Inorganic expansion (due to healthy cash balance) and healthy International IT service margins are other key positives. This, coupled with upward revision in earnings prompts us to maintain BUY on the stock with a revised target price of Rs. 685 (17x PE on FY23E EPS) (earlier target price Rs. 480).

For details, click on the link below: Link to the report

Shares of SONATA SOFTWARE LTD. was last trading in BSE at Rs.588 as compared to the previous close of Rs. 590.9. The total number of shares traded during the day was 13641 in over 744 trades.

The stock hit an intraday high of Rs. 594 and intraday low of 582. The net turnover during the day was Rs. 8014440.

Source : Equity Bulls

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