Crisil downgrades Sonata Information Technology

Crisil has downgraded its rating on the bank facilities of Sonata Information Technology to ‘CRISIL BBB+/Stable’ from ‘CRISIL A-/Stable’.

The downgrade reflect weakening in the business risk profile of the Sonata, Crisil said in a report on Sonata Information Technology.

The weakening is likely to continue because the group’s revenue growth is expected to be marginal and its profitability is likely to be lower than earlier expectation.

The report also stated that the outlook may be revised to positive if there is a significant improvement in the Sonata group’s profitability and if the group realises its advance tax receivables from the tax department.

Conversely, the outlook may be revised to negative if there is significant deterioration in the group’s capital structure or if there is any adverse outcome with respect to its large contingent liabilities.