Sonata Software extends gain on firm's foray into CX market to fuel growth

Shares of Sonata Software gained 4 per cent, in an otherwise weak market, and hit a high of Rs 502.95 on the BSE on Thursday. Moreover, the stock has gained 8 per cent in the past four days after it announced its plans to tap the Customer Experience (CX) market to fuel growth with the launch of ‘Cxe’. The stock of the IT consulting & software company hit an all-time high of Rs 539 on March 16.

Cxe is the company's unique enhanced integrated CX management solutions, developed using the ‘Platformation’ approach --Sonata’s highly acclaimed framework for digital transformation. ‘CXe’ is a compelling offering from Sonata designed for clients across the globe looking for holistic end-to-end CX solutions in the post-pandemic new normal.

"The global impact of the pandemic has been unprecedented, with the CX market witnessing a major upturn across all regions. According to a study by Fortune Business Insights, the market is projected to grow from $9.26 billion in 2020 to $21.86 billion in 2027 at a CAGR of 13 per cent in the 2020 to 2027 period," Sonata Software said in a press release on March 22.

Sonata had, in March 2020, acquired the Melbourne based GBW, pioneers in the CX domain with 30 years' experience delivering CX improvement for marquee brands across the globe. ‘CXe’ is a combined result of GBW’s CX Management tools and expertise supplemented by Sonata’s own Platformation methodology of driving digital transformation and deep expertise in aligned technologies like customer engagement, data and analytics.

Brokerage firm Prabhudas Lilladher expects healthy revenue momentum given huge opportunity in digital platforms & cloud. "The compensation hike across the board, effective 1st Jan, will result in some margin headwinds. Sonata has experienced strong acceleration of digital revenues in the last 4 quarters (over 12 per cent QoQ and over 47.5 per cent YoY). This can be attributed to Sonata’s approach to digitize the business using organically developed platforms (known as Platformation)," the brokerage firm said.

In the past three months, the stock has outperformed the market by surging 30 per cent, as against a 4 per cent rise in the S&P BSE Sensex. Over the past one year, it zoomed 190 per cent, as compared to a 71 per cent rally in the benchmark index.