Sonata Software banks on its international services business for growth

Sonata Software Ltd. is banking on its international services business to deliver the goods in a global economy convulsed by macroeconomic headwinds.

“We delivered 18.7% YoY growth on our international business in FY23. I think it’ll be higher going into the next year,” Samir Dhir, chief executive officer at Sonata Software, said during a post-earnings interaction with BQ Prime. “Of course, there are pockets of concern, especially in the hi-tech vertical, but overall, the business momentum continues.”

The company’s quarterly results, however, tell a different story.

The net profit of the Bengaluru-based information technology services company fell 3.30% from the previous three months to Rs 113.77 crore in the quarter ended March 31, according to an exchange filing on May 13.

That came on the back of revenue that slumped 15.36% sequentially to Rs 1,913.50 crore. For the full financial year, the bottom line grew 34.13% to Rs 7,450 crore, even as the top line came in at Rs 452 crore.

Sonata Software Q4 Results: Key Highlights (QoQ)

• Revenue down 15.36% at Rs 1,913.5 crore.
• EBIT is down 6.98% at Rs 132.68 crore.
• EBIT margin at 6.93% versus 6.30%.
• Net profit was down 3.30% at Rs 113.77 crore.

Dhir attributed the lacklustre performance to seasonality.

“Ours is an India-based business, which is very seasonal in nature. We generally end up seeing a spike in revenue in the third quarter, and it moderates out in the fourth quarter,” he said. “On the bottom line, though, there was a one-time expense relating to an acquisition the company made in Q3.” Bloomberg