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Last Updated on: 04 March, 2024|Author: Getaka | Social: X Twitter Profile

Fundamental Analysis of Sonata Software Ltd

About the Company - Sonata Software Ltd

Sonata Software Ltd. is a Public Limited Listed company incorporated on 18/10/1994 and has its registered office in the State of Maharashtra, India. Company’s Corporate Identification Number(CIN) is L72200MH1994PLC082110 and registration number is 082110. Currently Company is involved in the business activities of Other information technology and computer service activities n.e.c. Company’s Total Operating Revenue is Rs. 758.14 Cr. and Equity Capital is Rs. 10.39 Cr. for the Year ended 31/03/2022.
INDUSTRYADDRESSCONTACT
IT Consulting & Software208, T V Industrial Estate, 2nd Floor, S K Ahire Marg, Mumbai Maharashtra 400030info@sonata-software.com
http://www.sonata-software.com
Management
NamePosition Held
Mr. Sanjay K AsherDirector
Mr. Pradip P ShahChairman
Mr. P Srikar ReddyManaging Director & CEO
Mr. S B GhiaDirector
Mr. Viren RahejaDirector
Ms. Radhika RajanDirector

Sonata Software Ltd. Share Price Update

Share PriceValue
Today₹782.95
Previous Day₹796.75

Basic Stock Data of Sonata Software Ltd

Market Cap 23,048 Cr.
Current Price 822
High / Low870/369
Stock P/E53.4
Book Value 51.4
Dividend Yield0.95 %
ROCE39.1 %
ROE37.7 %
Face Value 1.00

Data Source: screener.in

Competitors of Sonata Software Ltd

Stock NameMarket CapCurrent PriceHigh / LowStock P/EBook ValueDividend YieldROCEROEFace Value
Trejhara Solutions Ltd 241 Cr. 166223/47.0 1270.00 %20.3 %22.6 % 10.0
Mphasis Ltd 49,917 Cr. 2,6422,838/1,66031.9 4191.85 %28.9 %21.9 % 10.0
Nucleus Software Exports Ltd 3,977 Cr. 1,4861,830/53419.2 2570.67 %27.1 %20.3 % 10.0
Tera Software Ltd 74.1 Cr. 59.282.5/28.521.4 87.20.00 %%% 10.0
Sasken Technologies Ltd 2,557 Cr. 1,6961,834/77032.5 4991.47 %17.1 %13.8 % 10.0
Industry Average11,353.22 Cr1,209.8421.00277.840.80%18.68%15.72%10.00

Sonata Software Ltd Quarterly Results

MonthDec 2020Mar 2021Jun 2021Sep 2021Dec 2021Mar 2022Jun 2022Sep 2022Dec 2022Mar 2023Jun 2023Sep 2023Dec 2023
Sales1,3961,0761,2699631,8581,4641,7791,4962,2611,9142,0161,9132,493
Expenses1,2859731,1688401,7261,3561,6371,3412,1051,7621,8371,7152,286
Operating Profit111103101123132108142155156152178197208
OPM %8%10%8%13%7%7%8%10%7%8%9%10%8%
Other Income31928141545181117252823-155
Interest5445544447212122
Depreciation1091012131313141419313334
Profit before tax100109115120130136143148155150154167-3
Tax %46%24%24%24%25%26%25%24%24%24%22%25%-1,389%
Net Profit5483879198101108113118114120124-46
EPS in Rs1.922.963.093.253.483.603.844.024.204.064.284.43-1.65

Sonata Software Ltd Quarterly Chart

Sonata Software Ltd Profit & Loss

MonthMar 2012Mar 2013Mar 2014Mar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023TTM
Sales1,5681,3111,5661,6821,9402,3712,4542,9613,7434,2285,5537,4498,102
Expenses1,5191,2581,4651,5141,7492,1912,2232,6253,3703,8485,0906,8457,419
Operating Profit4953101168192180231336373380464604683
OPM %3%4%6%10%10%8%9%11%10%9%8%8%8%
Other Income1-5117234767473058281027193
Interest1262389531515181953
Depreciation46108661112133740475997
Profit before tax-8-15107182225226260349379352500597627
Tax %-119%-93%27%27%30%31%26%29%27%31%25%24%
Net Profit-15-2878133159157192249277244376452476
EPS in Rs-0.09-1.002.774.775.665.576.878.899.888.7013.4216.1216.97
Dividend Payout %-305%-66%51%55%60%60%57%53%76%60%58%48%

Sonata Software Ltd Profit & Loss Yearly Chart

YoY Net Profit Growth
Year2012-20132013-20142014-20152015-20162016-20172017-20182018-20192019-20202020-20212021-20222022-2023
YoY Net Profit Growth (%)-86.67%378.57%70.51%19.55%-1.26%22.29%29.69%11.24%-11.91%54.10%20.21%
Change in YoY Net Profit Growth (%)0.00%465.24%-308.06%-50.96%-20.81%23.55%7.39%-18.44%-23.16%66.01%-33.89%

Sonata Software Ltd Growth

Compounded Sales Growth
10 Years:19%
5 Years:25%
3 Years:26%
TTM:19%
Compounded Profit Growth
10 Years:32%
5 Years:19%
3 Years:18%
TTM:-2%
Stock Price CAGR
10 Years:46%
5 Years:46%
3 Years:68%
1 Year:135%
Return on Equity
10 Years:34%
5 Years:36%
3 Years:36%
Last Year:38%

Sonata Software Ltd Balance Sheet

MonthMar 2012Mar 2013Mar 2014Mar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023Sep 2023
Equity Capital11111111111010101010101414
Reserves3643313644184605806437586598951,0891,2871,426
Borrowings431762417655341686185159590503
Other Liabilities3911962793553455525457448618561,3012,4662,905
Total Liabilities8095546598089921,1981,2321,5281,6161,9472,5594,3574,848
Fixed Assets1882217231201181141992983244271,7321,697
CWIP2000000100011
Investments2422586452128198146147615922087
Other Assets5955115847218209519201,1821,3051,5471,9742,4043,063
Total Assets8095546598089921,1981,2321,5281,6161,9472,5594,3574,848

Sonata Software Ltd Reserves and Borrowings Chart

Sonata Software Ltd Cash Flow

MonthMar 2012Mar 2013Mar 2014Mar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023
Cash from Operating Activity 375012777158185290-6369443450268
Cash from Investing Activity -62-6-39-126-133-310412139-112-87-771
Cash from Financing Activity -4-28-41-51-30-173-140-166-310-62-271187
Net Cash Flow-281546-100-49253-16019826893-316

Sonata Software Ltd Financial Efficiency Indicators

MonthMar 2012Mar 2013Mar 2014Mar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023
Debtor Days4639496767805910068536161
Inventory Days2000330000002
Days Payable108617290849687
Cash Conversion Cycle-42-21-23-20-1480591006853-35-24
Working Capital Days7-4-614219-11254-9-13-23
ROCE %4%12%28%44%42%35%39%46%51%39%44%39%

Sonata Software Ltd Financial Efficiency Indicators Chart

Sonata Software Ltd Share Holding Pattern

MonthMar 2021Jun 2021Sep 2021Dec 2021Mar 2022Jun 2022Sep 2022Dec 2022Mar 2023Jun 2023Sep 2023Dec 2023
Promoters28.17%28.17%28.17%28.17%28.17%28.17%28.17%28.17%28.17%28.17%28.17%28.17%
FIIs13.89%15.46%16.56%14.00%13.71%12.87%12.96%12.84%12.95%13.59%14.98%14.47%
DIIs13.05%12.83%12.97%14.65%14.69%14.97%13.98%13.79%13.86%14.31%16.38%17.60%
Public43.70%42.35%41.11%41.99%42.25%42.81%43.69%44.09%43.94%42.87%39.41%38.71%
Others1.19%1.19%1.19%1.19%1.18%1.17%1.17%1.09%1.08%1.06%1.04%1.03%
No. of Shareholders71,28371,72586,34690,25391,98399,1581,16,0701,10,4511,08,0151,12,6291,12,2741,55,692

Sonata Software Ltd Shareholding Pattern Chart

No. of Sonata Software Ltd Shareholders

Sonata Software Ltd Mutual Fund Holdings

Fund NameNo of SharesAUM (%)Amount Invested (Cr)
HDFC Small Cap Fund - Regular Plan186798105.171387.44
HSBC Small Cap Fund - Regular Plan48964902.75363.69
Tata Digital India Fund32479922.6241.24
HDFC Childrens Gift Fund - Regular Plan27453142.48203.91
HSBC Value Fund23260641.61172.77
Nippon India Small Cap Fund15440840.26114.69
Aditya Birla Sun Life Digital India Fund15331922.48113.88
NJ Balanced Advantage Fund15131332.91112.39
HSBC Midcap Fund10306000.8376.55
ICICI Prudential Technology Fund8346780.5262

Sonata Software Ltd ROCE Trend

Sonata Software Ltd EPS Trend

Sonata Software Ltd Key Financial Ratios

MonthMar 23Mar 22Mar 21Mar 20Mar 19
FaceValue1.001.001.001.001.00
Basic EPS (Rs.)32.5836.2123.4826.6623.99
Diluted EPS (Rs.)32.5836.2123.4826.6623.97
Cash EPS (Rs.)36.8440.7827.2930.1725.18
Book Value[Excl.RevalReserv]/Share (Rs.)93.77105.7987.1564.4573.94
Book Value[Incl.RevalReserv]/Share (Rs.)93.77105.7987.1564.4573.94
Revenue From Operations / Share (Rs.)537.07534.49406.94360.28284.98
PBDIT / Share (Rs.)48.6654.4539.1841.5034.92
PBIT / Share (Rs.)44.4049.9035.3737.9933.70
PBT / Share (Rs.)43.0648.1633.8936.5233.64
Net Profit / Share (Rs.)32.5836.2323.4826.6523.95
NP After MI And SOA / Share (Rs.)32.5836.2323.4826.6523.99
PBDIT Margin (%)9.0610.189.6211.5112.25
PBIT Margin (%)8.269.338.6910.5411.82
PBT Margin (%)8.019.018.3210.1311.80
Net Profit Margin (%)6.066.775.767.398.40
NP After MI And SOA Margin (%)6.066.775.767.398.41
Return on Networth / Equity (%)34.7434.2426.9441.3532.44
Return on Capital Employeed (%)28.0740.9736.4750.2543.13
Return On Assets (%)10.3714.7312.5317.1316.31
Long Term Debt / Equity (X)0.230.000.000.000.00
Total Debt / Equity (X)0.370.030.090.120.02
Asset Turnover Ratio (%)0.540.550.650.800.87
Current Ratio (X)1.121.501.561.431.74
Quick Ratio (X)1.101.501.561.431.74
Dividend Payout Ratio (NP) (%)51.3649.6817.03105.9947.90
Dividend Payout Ratio (CP) (%)45.4244.1314.6593.6345.57
Earning Retention Ratio (%)48.6450.3282.97-5.9952.10
Cash Earning Retention Ratio (%)54.5855.8785.356.3754.43
Interest Coverage Ratio (X)36.4131.3426.4528.41107.04
Interest Coverage Ratio (Post Tax) (X)25.3721.8516.8519.2473.60
Enterprise Value (Cr.)11378.066956.974704.791402.353330.31
EV / Net Operating Revenue (X)1.531.251.110.371.12
EV / EBITDA (X)16.8612.3011.563.259.18
MarketCap / Net Operating Revenue (X)1.561.381.250.451.19
Retention Ratios (%)48.6350.3182.96-5.9952.09
Price / BV (X)8.936.995.842.564.57
Price / Net Operating Revenue (X)1.561.381.250.451.19
EarningsYield0.030.040.040.160.07

Sonata Software Ltd Profitability Ratios (%)

Sonata Software Ltd Liquidity Ratios

Sonata Software Ltd Liquidity Ratios (%)

Sonata Software Ltd Interest Coverage Ratios (X)

Sonata Software Ltd Valuation Ratios

Fair Value / Intrinsic Value of Sonata Software Ltd

Fair Value: ₹1044.60

The stock is undervalued by 27.08% compared to the current price ₹822

*Investments are subject to market risks

Strength and Weakness of Sonata Software Ltd

StrengthWeakness
  1. The stock has a high average ROCE of 35.25%, which is a positive sign.
  2. The stock has a low average Working Capital Days of 1.17, which is a positive sign.
  3. The company has higher reserves (713.38 cr) compared to borrowings (145.69 cr), indicating strong financial stability.
  4. The company has shown consistent growth in sales (2.92 cr) and profit (290.85 cr) over the years.
  1. The stock is trading at a high valuation with an average P/B ratio of 40.27 and average Dividend Yield of 9.73%.
  2. The stock has a high average Cash Conversion Cycle of 15.08, which may not be favorable.

Should I Buy Sonata Software Ltd Share Now?

  • Based on the analysis of various financial indicators, it may be worth considering investment in Sonata Software Ltd:
    1. Net Profit Margin: 6.06% (Higher values are generally favorable)
      • Net Profit Margin: This metric indicates the percentage of profit a company makes from its total revenue. A higher net profit margin is generally desirable as it reflects better profitability.
    2. ROCE: 28.07% (Industry Average ROCE: 10.91%)
      • ROCE (Return on Capital Employed): ROCE measures a company's profitability and the efficiency with which its capital is employed. A higher ROCE indicates efficient use of capital.
    3. Interest Coverage Ratio (Post Tax): 25.37 (Higher values, preferably > 2, are recommended)
      • Interest Coverage Ratio: The interest coverage ratio measures a company's ability to cover its interest payments on outstanding debt. A ratio greater than 2 is generally considered healthy as it indicates the company can meet its interest obligations comfortably.
    4. Quick Ratio: 1.10 (Higher values, preferably > 1, are recommended)
      • Quick Ratio: The quick ratio assesses a company's ability to cover its short-term liabilities with its most liquid assets. A ratio higher than 1 suggests the company can meet its short-term obligations without relying heavily on inventory.
    5. ✓ Stock P/E: 54.1 (Industry average Stock P/E: 328.92)
      • Stock P/E (Price-to-Earnings) Ratio: The P/E ratio compares a company's current share price to its earnings per share. A lower P/E ratio relative to industry peers or historical values may indicate that the stock is undervalued.
    6. ✓ Total Debt / Equity: 0.37 (Lower values, preferably < 1, are preferred)
      • Total Debt / Equity: This ratio measures a company's financial leverage by comparing its total debt to its total equity. A lower ratio indicates lower financial risk and greater financial stability.
    While these metrics suggest potential opportunity, it's essential to conduct thorough research or seek advice from financial experts before making any investment decisions.

About the Author

Author Avatar
Getaka

Getaka, CFA, a financial analyst with 15 years of experience in the industry. Getaka holds an MBA degree and the Chartered Financial Analyst designation, demonstrating his profound understanding of financial analysis and investment management. Throughout his career, he has conducted numerous financial analyses and due diligence processes for companies in the industry, and has a strong track record of identifying key trends and opportunities. He leverages his expertise to deliver a thorough financial analysis of a company, encompassing its financial performance, key ratios, future prospects, and risks. Getaka is committed to providing accurate, reliable, and trustworthy information to help readers make informed decisions about their finances and investments.

Disclaimer: This article is for informational purposes only and should not be construed as financial advice. The author is not a SEBI registered financial advisor and does not have any vested interest in Sonata Software Ltd. Investors are advised to conduct their own due diligence and consult with a financial professional before making any investment decisions. The information provided in this article is based on publicly available data and the author's analysis, but it may not be comprehensive or up-to-date. The author and getaka.co.in are not responsible for any errors or omissions in the content. This article is not intended to promote any particular investment strategy or recommendation, and readers should consult with their own financial advisors before making any investment decisions. Data Source: NSE