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Business Standard
31-07-2025
- Business
- Business Standard
Sonata Software Q1 PAT rises 2% QoQ to Rs 109 cr
Sonata Software's consolidated net profit rose 1.68% QoQ to Rs 109.34 crore in Q1 FY26, up from Rs 107.53 crore in Q4 FY25. Revenue from operations jumped 13.29% QoQ to Rs 2,965.18 crore during the quarter ended 30 June 2025. On a year-on-year basis, the companys profit after tax increased by 3.51%, while revenue from operations grew by 17.31% in Q1 FY26. Profit before tax stood at Rs 4,258.3 crore for the quarter, up 1.30% quarter-on-quarter (QoQ) and 7.73% year-on-year (YoY). EBITDA stood at Rs 159.6 crore in Q1 FY26, down 7.6% quarter-on-quarter (QoQ) and 9.4% year-on-year (YoY). In International IT Services segment, revenues for Q1 FY26 stood at Rs 699.9 crore, QoQ de-growth of 0.3%. In USD terms, revenue stood at $81.8 million, marking a modest 0.6% increase quarter-on-quarter (QoQ). However, when adjusted for constant currency (CC), revenue saw a 0.9% QoQ decline, highlighting the impact of currency fluctuations. The Domestic Products & Services segment delivered robust top-line growth in Q1 FY26, though profitability metrics showed some pressure. Revenue for the quarter stood at Rs 2,274.7 crore, reflecting a strong 18.6% quarter-on-quarter (QoQ) growth, driven by increased demand and expanded offerings. However, gross contribution for the same period declined to ₹68.5 crore, marking a 12.6% drop QoQ, indicating margin compression or higher input costs. Samir Dhir, MD & CEO of Sonata Software, said: International IT Services Q1 marked steady progress with revenue growth of 0.6% QoQ. We secured three large deals - two in BFSI and one in TMT - underscoring our focus on large deals and execution strength. Our focused investments in Healthcare and BFSI have scaled from 13% to 32% of revenue over three years, validating our diversification strategy. As clients accelerate modernization to stay competitive, we remain confident in our long-term growth trajectory. Sujit Mohanty, MD & CEO of Sonata Information Technology, added: We gained new clients in cloud and data protection services. Our continued investments and partnerships with leading cloud providers position us well to grow revenue from cloud-managed services in the coming quarters. Sonata Software is primarily engaged in the business of providing Information Technology (IT) Services and Solutions to its various customers in the United States of America, Europe, Middle East, Australia and India. Shares of Sonata Software tanked 5.50% to currently trade at Rs 391.05 on the BSE.
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Business Standard
31-07-2025
- Business
- Business Standard
Sonata Software dips 7% post Q1 results; Emkay retains Buy, here's why
Shares of Modernisation Engineering Company Sonata Software fell as much as 6.61 per cent to an intra-day low of ₹386.55 per share on the NSE during intra-day deals on Thursday, July 31, 2025. At around 1:40 PM on Thursday, Sonata Software shares were seen trading at ₹392.85 per share, down 5.10 per cent from its previous close of ₹413.95 per share on the NSE. The counter saw trades of around 1.5 million equity shares estimated to be valued at around ₹58 crore on the NSE, and BSE. Why are Sonata Software shares falling today? The fall in the company's share price came on the back, after the company reported its Q1 results, which came below street expectations. During Q1FY26, the company reported a rise in its profit after tax (PAT) by 3.5 per cent year-on-year (Y-o-Y) to ₹109.3 crore from ₹105.6 crore reported in Q1FY25. The company's revenue increased by 17.3 per cent Y-o-Y to ₹2,965.2 crore from ₹2,527.4 crore. During the quarter, the company's earnings before income tax, depreciation, and amortisation (Ebitda) advanced 3.5 per cent Y-o-Y to ₹109.3 crore from ₹105.6 crore. Check List of Q1 results today Management commentary Commenting on the Q1 performance, Samir Dhir, MD & CEO of Sonata Software, said, "international IT Services Q1 marked steady progress with revenue growth of 0.6 per cent on a sequential basis. We secured three large deals -two in BFSI and one in TMT- underscoring our focus on large deals and execution strength. Our focused investments in Healthcare and BFSI have scaled from 13 per cent to 32 per cent of revenue over three years, validating our diversification strategy. As clients accelerate modernization to stay competitive, we remain confident in our long-term growth trajectory." Sujit Mohanty, MD & CEO of Sonata Information Technology, added, "We gained new clients in cloud and data protection services. Our continued investments and partnerships with leading cloud providers position us well to grow revenue from cloud-managed services in the coming quarters." Emkay retains 'Buy' rating on Sonata Software shares Analysts at Emkay have retained their Buy rating on the stock with a target price of ₹475 at 22x Jun-27E EPS. The analysts, however, highlighted that the company posted another quarter of weak operating performance in Q1. Analysts pointed out that the company secured three major deals in Q1, including a $73 million total contract value (TCV) with a US-based TMT client. It reported total order bookings of $105 million and a book-to-bill ratio of 1.28x. Growth during Q1 was led by a large TMT deal ramp-up, continued strength in HLS, and demand for data and AI services. However, performance was impacted by softness in retail and manufacturing, budget pressures at a key BFSI client, and broader macroeconomic slowdown. The domestic business faced the impact of a slowdown in the IT/ITeS sector, with several OEMs planning a shift to a direct engagement model for large clients. The analysts further highlighted that, "The management refrained from providing specific growth outlook, citing challenges in RMD, a large BFSI client, and macro uncertainty. However, it remains hopeful of positive revenue growth in IT Services in FY26. It expects to achieve near-20 per cent Ebitda margin in IT Services by FY26-end, driven by large deal ramp-ups, improved utilisation, offshore shift, and pyramid rationalisation. Factoring in the dismal Q1 performance, analysts have cut FY26-28E EPS by 1-9 per cent." About Sonata Software Headquartered in Bengaluru, Sonata Software is an IT services and solutions company specialising in modernisation engineering and digital transformation. The company's suite of Modernisation Engineering Services spans data, cloud, Dynamics, automation, cybersecurity, and newer technologies like Generative AI, Microsoft Fabric, and other modernization platforms. Sonata Software has a strong global presence, including key regions such as North America, the UK, Europe, APAC, and ANZ. The company has a market capitalisation of ₹10,981.44 crore on the NSE, as of July 31.
Business Standard
31-07-2025
- Business
- Business Standard
Sonata Software Q1 FY26 Consolidated PAT Grew 1.7% QoQ, And Announces First Interim Dividend of Rupees 1.25 Per Share
PRNewswire Mumbai (Maharashtra) [India], July 31: Sonata Software (NSE: SONATSOFTW) (BSE: 532221), a leading Modernization Engineering Company, today reported its unaudited financial results for the Quarter ended June 30, 2025. Commenting on the Q1 performance, Mr. Samir Dhir, MD & CEO of Sonata Software said, "International IT Services Q1 marked steady progress with revenue growth of 0.6% QoQ. We secured three large deals - two in BFSI and one in TMT - underscoring our focus on large deals and execution strength. Our focused investments in Healthcare and BFSI have scaled from 13% to 32% of revenue over three years, validating our diversification strategy. As clients accelerate modernization to stay competitive, we remain confident in our long-term growth trajectory." Mr. Sujit Mohanty, MD & CEO of Sonata Information Technology Limited added, "We gained new clients in cloud and data protection services. Our continued investments and partnerships with leading cloud providers position us well to grow revenue from cloud-managed services in the coming quarters." Financial Highlights for Q1'26: * International IT Services: * In USD terms, revenue for Q1'26 stood at $81.8 million, showing a growth of 0.6% QoQ and in CC terms, showing a decline of 0.9% QoQ. * In Rupee terms, revenue for Q1'26 stood at ₹699.9 crores, showing a decline of 0.3% QoQ. * EBITDA (before other income and forex) for Q1'26 stood at 16.6%, showing a growth of 0.1bps QoQ. * PAT for Q1'26 stood at ₹70.7 crores, showing a growth of 13.5% QoQ * DSO stood at 62 days in Q1'26, compared to 61 days in Q4'25. * ROCE stood at 14.7% in Q1'26, compared to 16.3% in Q4'25. * RONW stood at 20.9% in Q1'26, compared to 19.3% in Q4'25. * 7 new customers were added during the quarter, including a mega deal of $73 M AI-led Digital Modernization Deal with a Leading US TMT Company. * Domestic Products & Services: * Revenue for Q1'26 stood at ₹2274.7 crores, showing a growth of 18.6% QoQ. * Gross contribution for Q1'26 stood at ₹68.5 crores, showing a decline of 12.6% QoQ. * EBITDA (before other income and forex) for Q1'26 stood at ₹44.0 crores, showing a decline of 22.1% QoQ. * PAT for Q1'26 stood at ₹38.6 crores, showing a decline of 14.6% QoQ. * DSO stood at 63 days in Q1'26, compared to 46 days in Q4'25. * ROCE stood at 33.6% in Q1'26, compared to 43.2% in Q4'25. * RONW stood at 32.5% in Q1'26, compared to 47.7% in Q4'25. * Consolidated: * Revenue for Q1'26 stood at ₹2,965.2 crores, showing a growth of 13.3%. * EBITDA (before other income and forex) for Q1'26 stood at ₹159.6 crores, showing a decline of 7.6% QoQ. * PAT for Q1'26 stood at ₹109.3 crores, growth of 1.7% QoQ. * Cash and cash equivalents (gross) stood at INR 600 Crs. and (net) stood at negative ₹ 62.5 Crores in Q1'26. * ROCE stood at 18.5% in Q1'26, compared to 21.9% in Q4'25. * RONW stood at 24.0% in Q1'26, compared to 25.2% in Q4'25. About Sonata Software Limited In today's market, there is a unique duality in technology adoption. On one side, extreme focus on cost containment by clients, and on the other, deep motivation to modernize their Digital storefronts to attract more consumers and B2B customers. Sonata Software, with $1 billion revenue, is the leading Modernization company. Our unique Modernization approach through helps create efficient and agile digital businesses to drive intelligent ecosystems of the future. Our bouquet of Modernization Engineering services cuts across Data, Cloud, Dynamics, Automation, Cyber Security, and around newer technologies like Generative AI, Microsoft Fabric, and other modernization platforms. Our unique and innovative Responsible-first AI offering Sonata is a comprehensive platform powered by GenAI and encompasses a variety of industry solutions, service delivery platforms, and accelerators. It is distinguished by its embedded ethics, privacy, security, and compliance. We enable our clients to leverage AI in three different ways: i) driving efficiencies, ii) driving higher consumer experience/modern sales, and iii) driving innovative business models. Headquartered in Bengaluru, India, Sonata Software has a strong global presence, including key regions North America, UK, Europe, APAC, and ANZ. We are one of the fastest growing IT Services companies and a trusted partner of Fortune 500 companies in Banking, Financial Services and Insurance (BFSI); Healthcare and Lifesciences (HLS); Telecom, Media, and Technology (TMT); and Retail, Manufacturing and Distribution (RMD) space. Sonata Software boasts of a very strong partnership with Microsoft, AWS and many others. We are a proud member of Microsoft AI Partner Council and have also achieved AWS Generative AI Competency. Also, we are a member of the prestigious Inner Circle for Microsoft Business Applications and Featured and Launch Partner for Microsoft Fabric. About Sonata Information Technology Limited Sonata Information Technology Limited, our Domestic Business, partners with Indian enterprise customers in their digital transformation journeys. As a digital transformation partner, it helps enterprises adopt and scale cloud solutions, fostering innovation and growth. It also helps customers in managing & maintaining their Hybrid Cloud Platforms and related enterprise IT security environments.
Business Standard
25-07-2025
- Business
- Business Standard
Sonata Software Collaborates with Wharton AI & Analytics Initiative to Advance Understanding of Agentic AI in Enterprise Operations
PRNewswire East Brunswick (New Jersey) [US] / Bengaluru (Karnataka) [India], July 25: Sonata Software (NSE: SONATSOFTW) (BSE: 532221), a leading Modernization Engineering company, today announced its partnership with the Wharton AI & Analytics Initiative (WAIAI) at the Wharton School of the University of Pennsylvania. The collaboration aims to foster innovation and research in the emerging field of agentic AI, which will bring together academic and industry perspectives on enterprise-grade AI orchestration. As part of the partnership, Sonata Software and WAIAI will collaboratively: * Evaluate agentic AI systems with a focus on AI governance, compliance, human-AI collaboration, and enterprise adoption * Refine Sonata AgentBridge's modular architecture, embedding rigorous compliance and ethical safeguards * Support the continued expansion of WAIAI's research initiatives in artificial intelligence Sonata Software and WAIAI will co-host a one-day academic convening in Fall 2025 centered on agentic AI. The event will facilitate discussions on opportunities and challenges through academic-industry dialogue. It will feature roundtable discussions and interactive demos with experts from both sectors. Insights garnered from the event will inform a white paper, highlighting key themes and recommendations on the ethical and effective deployment of agentic AI tools in enterprise contexts. Samir Dhir, Managing Director and Chief Executive Officer of Sonata Software, said: "We're excited to collaborate with the Wharton AI & Analytics Initiative to explore the evolving capabilities of agentic systems within enterprise environments. This partnership reinforces our commitment to responsible AI by blending Sonata Software's platform-driven innovation with academic insight and by jointly examining how agentic systems can be responsibly adopted to deliver measurable business impact." This partnership marks Sonata Software's first major engagement with a U.S. Ivy League institution, underscoring its transformation into an AI-led Modernization leader. Most recently, Sonata Software has partnered with Indian Institute of Science (IISc) to power AI-driven scientific research and champion adoption of responsible-first AI approach. About Sonata Software In today's market, there is a unique duality in technology adoption. On one side, extreme focus on cost containment by clients, and on the other, deep motivation to modernize their Digital storefronts to attract more consumers and B2B customers. Sonata Software, with $1 Billion Revenue, is the leading AI-led Modernization Engineering company. Our unique Modernization approach through helps create Efficient and Agile digital businesses to drive intelligent ecosystems of the future. Our bouquet of Modernization Engineering Services cuts across Data, Cloud, Dynamics, Automation, Cyber Security, and around newer technologies like Generative AI, Microsoft Fabric, and other modernization platforms. Our unique and innovative Responsible-first AI offering Sonata is a comprehensive platform powered by GenAI and encompasses a variety of industry solutions, service delivery platforms, and accelerators. It is distinguished by its embedded ethics, privacy, security, and compliance. We enable our clients to leverage AI in three different ways: i) driving efficiencies, ii) driving higher consumer experience/modern sales, and iii) driving innovative business models. We have launched bleeding edge Agentic AI offering - AgentBridge - that enables enterprises to usher in the era of intelligent, scalable AI-driven operations. Headquartered in Bengaluru, India, Sonata Software has a strong global presence, including key regions North America, UK, Europe, APAC, and ANZ. We are one of the fastest growing IT Services companies and a trusted partner of Fortune 500 companies in Banking, Financial Services and Insurance (BFSI); Healthcare and Lifesciences (HLS); Telecom, Media, and Technology (TMT); and Retail, Manufacturing and Distribution (RMD) space. Sonata Software boasts of a very strong partnership with Microsoft, AWS and many others. We are proud member of Microsoft AI Partner Council and have also achieved AWS Generative AI Competency. Also, we are member of the prestigious Inner Circle for Microsoft Business Applications and Featured and Launch Partner for Microsoft Fabric. About the Wharton AI & Analytics Initiative The Wharton AI & Analytics Initiative (WAIAI) is advancing the exploration of cutting-edge technology in modern business, with the keen understanding that artificial intelligence is transforming how we live, learn, and work. Led by Vice Dean Eric Bradlow -- professor of marketing, statistics, and data science -- WAIAI spearheads innovative student learning experiences, faculty research opportunities, and thought partnerships with industry experts and practitioners. Our initiative also extends to K-12 education, preparing the next generation to leverage AI to its full potential. For more information, visit
Mint
03-07-2025
- Business
- Mint
Sonata Software stares at revenue dent as Microsoft eyes direct licence sales
A global technology giant's attempts to sell its software licences directly to clients might lead to an unexpected casualty in Sonata Software Ltd, which counts that tech company as one of its five largest customers. Sonata Software, which entered Indian IT's $1-billion annual revenue club last year, is expected to get less business selling Microsoft licences, according to at least three people with knowledge of the matter. According to experts, the IT services company gets more than $500 million from selling Microsoft product licences, making it one of the only large IT outsourcers to sell such licences. This translates to almost half of its $1.2 billion revenue in FY25. 'Microsoft has talked about, or they're considering at least, going directly to a few large customers," said Samir Dhir, managing director and chief executive of Sonata Software, in an interview with Mint on 26 June. He said that the Bengaluru-based company considers this possible move as a threat. 'Is that a threat we see? The answer is, yes. Is that giving us sleepless nights? Perhaps not. It's something that we're watching cautiously. It might have a one or two quarter bump here and there," said Dhir. Analysts said Microsoft's move is aimed at cutting costs. 'Microsoft is saying that for large clients who require more than 10,000-plus licences, they will go for direct billing because it is one way of cutting costs and they probably do not want the IT outsourcers to keep the extra cut that comes from selling these licences," said Amit Chandra, IT analyst at HDFC Securities. 'This will be a gradual decision but Sonata is also de-risking it and focusing on selling more licences of other partners," said Chandra. Microsoft did not respond to Mint's queries. This move by Microsoft comes on the back of the tech company giving fewer tech services work to Indian outsourcers, including LTIMindtree Ltd, because of its own AI capabilities, according to Mint's report on 4 May. In a rare instance, Dhir called out lower revenue from one of its top clients, in a 16 April stock exchange, which Mint's report revealed to be Microsoft. He added that this is not the first time that Microsoft is trying to deal with clients directly. 'They have tried this model in the past as well. Okay, it hasn't worked. So they're trying again. It might work this time, it might not go this time," said Dhir. Sonata Software gets about 30% of its business managing back-end IT infrastructure for international businesses and the remaining 70% from selling software product licences to companies. Microsoft's licence reselling business makes up most of that business followed by Google, Oracle and other such licences. Sonata has about 7,000 employees, according to the company's management. This translates to each employee fetching around $171,428 for the company, which is the highest amongst the country's largest IT outsourcers. If indeed there is a hit in Microsoft's licensing business, it will likely dent Sonata's revenue per employee as three-fourths of the company's business comes from selling software licences that need fewer people. A second analyst attributed Microsoft's move to client sensitivity. 'Microsoft is dealing with large clients directly because these are sensitive customers and Microsoft wants to keep its own dedicated sales and support staff for such accounts," said a Mumbai-based analyst on the condition of anonymity. For now, Sonata is not perturbed and is looking to widen its client base. 'We have anticipated this. We have been working on de-risking the business in multiple ways," said Dhir. 'So we're not the top 10 Indian companies' reseller. We are a top, I would say, probably about 400 to 500 companies' reseller in India. And also, we have broadened the pyramid where we were selling (licences)," said Dhir. He added that the company is also selling software licences of other companies including AWS, Oracle and Google. Sonata has counted Microsoft as its client for more than 30 years and is among the top 1% of Microsoft's partners, according to its FY24 annual report. Microsoft, which follows a July-June financial year, ended its previous financial year with $245 billion in revenue. In other words, Microsoft is almost four times the size of Accenture Plc., the world's largest IT services company, by revenue. Lower business from Microsoft serves as a wake-up call for Sonata, which is now expected to lose business from its IT outsourcing unit to the licence reselling unit. Homegrown IT services companies work with Microsoft in two ways. One, as system integrators for Microsoft's software products. If a burger chain wants to use Microsoft's software to manage its sales and billing infrastructure, it can purchase the software from IT outsourcers like Sonata Software. Sonata will not just give the burger chain access to Microsoft's software, but will also fit the software in its computers and earn extra money. Secondly, IT service providers send engineers to Microsoft to manage its software products. These engineers ensure the functioning and backend requirements of Microsoft's software sold to companies such as the ice cream chain. For Sonata, both businesses from Microsoft are now under pressure.
