Sonata Q4 net up 2% on volume fall

The fall in the volume of business both for its Indian as well as international operations in the wake of the global financial meltdown in the fourth quarter, Bangalore-headquartered IT services firm Sonata Software has posted a marginal 1.89 per cent increase in its net profit to Rs 17.22 crore in the quarter ended 31st March, 2009 when compared with the same period previous fiscal. The consolidated revenue of the company for the quarter at Rs 370.69 crore saw of drop of 4.5 per cent on year on year basis.

For fiscal 2008-09, the company’s net profit grew by 30.84 per cent to Rs 76.57 crore. The annual revenue of the company grew by 10.8 per cent to Rs 1600.3 crore when compared with the fiscal 2007-08.

B Ramaswamy, president and MD, Sonata Software said the fourth quarter performance was primarily impacted as the existing clients had cut their budget in the range of 5-20 per cent while some of them are also asking for a cut in the pricing. “We are seeing the trimming of IT budget by many of our clients which has resulted in a pricing pressure as some of them are asking for a price rationalisation.

However, we are promising them with better value for their money and giving them the options of outcome based price and fixed price,” he added. The company added 9 new clients during the quarter and 21 clients during the fiscal.

Sonata which has a cash reserves of close to Rs 43 crore is also looking at acquisitions in the US and Europe for companies in the revenue range of $30-$50 million. Ramaswamy said the company was primarily looking at expanding its capabilities in the managed services, OPD, SAP and infrastructure management space. “It is a strategic decision of the company, and the acquisition will be complimentary to our present service offerings,” he added.