Sonata Software rallies 9%, hits new high post June quarter results

The management said it see the demand situation as being extremely satisfactory with growth in existing accounts and new deal pipeline

Shares of Sonata Software rallied 9 per cent to Rs 884.05, also its new high on the BSE in intra-day trade on Thursday after the company reported a strong 74 per cent year-on-year (YoY) jump in consolidated net profit at Rs 86.7 crore for the first quarter of the financial year 2021-22 (Q1FY22). On a sequential basis, the profit grew by 4 per cent from Rs 83.1 crore in Q4FY21.

The company’s consolidated revenues grew 33 per cent YoY and 18 per cent quarter-on-quarter (QoQ) to Rs 1,268 crore. Ebitda (earnings before interest, taxes, depreciation, and amortisation) margin improved 165 basis points (bps) YoY but was down 116 bps QoQ at 10.17 per cent during the quarter under review.

The management said it sees the demand situation as being extremely satisfactory with growth in existing accounts and new deal pipeline. “Our acquisition of Encore is promising as it gives us access to fast the growing health care provider segment and expanding our cloud footprint apart from a new delivery location in Chennai,” the management said.

The stock of the information technology (IT) services firm has outperformed the market by zooming 115 per cent in the past six months, as compared to a 7.3 per cent rise in the S&P BSE Sensex.

Sonata Software is a global IT service and technology solutions company and its unique trademarked ‘PlatformationTM’ strategy for Digital Transformation is witnessing significant upturn globally among its customers. The company completed 4 years in March 2021 of PlatformationTM.

Sonata sees more synergies with its IP-Led approach in various industry verticals aligned to Microsoft GTM and PlatformationTM approaches. With its PlatformationTM strategy, Sonata is well-positioned to help its customers achieve digital transformation in today’s new normal environment of digitalization, the company said in the financial year 2020-21 (FY21) annual report.