Sonata Software Limited Earnings Summary — Q3 FY2025
Sonata Software Delivers Strong Domestic Performance and International CC Growth Despite One-Time Cost Pressures
Quarterly Business Intelligence
AI Quarterly Scorecard™
Computed deterministically from the last 10 reported quarters.
Quarterly Business Momentum
- Revenue grew 29.3% sequentially in Q1 FY2027.
- Revenue of ₹3,279 Cr is 10.6% higher year-on-year.
- Revenue has compounded at 19.6% annualised over the last 10 quarters.
- Revenue is at its highest level in 10 quarters.
- Net profit of ₹108 Cr is 1.1% below the same quarter last year.
- Profit growth is trailing revenue growth this quarter.
- Net profit has compounded at -0.9% annualised across the period.
- Operating margin stands at 5.2% in Q1 FY2027.
- Operating margin compressed by 17 bps year-on-year.
- Over the last two years operating margin has contracted by 176 bps.
- PBT margin is 4.2%.
- Expenses grew 10.8% against revenue growth of 10.6%.
- Operating profit of ₹171 Cr is 7.0% higher year-on-year.
- Operating leverage has been under pressure recently.
- 4 of the last 6 measured quarters delivered year-on-year revenue growth.
- Overall quarterly business momentum scores 57/100 (Healthy) on the latest 10 quarters.
- Business momentum is broadly stable quarter to quarter.
Quarterly Financials
Last 10 Reported Quarters • All figures in ₹ Crore • Margins in %
| Metric | Trend | Latest Q1 FY2027 | Q4 FY2026 | Q3 FY2026 | Q2 FY2026 | Q1 FY2026 | Q4 FY2025 | Q3 FY2025 | Q2 FY2025 | Q1 FY2025 | Q4 FY2024 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | Accelerating | 3,279 | 2,536 | 3,081 | 2,119 | 2,965 | 2,617 | 2,843 | 2,170 | 2,527 | 2,192 |
| Expenses | Accelerating | 3,108 | 2,328 | 2,880 | 1,947 | 2,806 | 2,445 | 2,679 | 1,993 | 2,351 | 2,047 |
| Operating Profit | Stable | 171 | 209 | 200 | 173 | 160 | 173 | 164 | 177 | 176 | 144 |
| Operating Margin | Stable | 5.2% | 8.2% | 6.5% | 8.2% | 5.4% | 6.6% | 5.8% | 8.2% | 7.0% | 6.6% |
| Other Income | Volatile | 7 | 6 | -20 | 31 | 24 | 11 | 21 | 19 | 19 | 55 |
| Interest | Volatile | 12 | 19 | 13 | 14 | 5 | 10 | 16 | 19 | 20 | 22 |
| Depreciation | Stable | 28 | 25 | 27 | 26 | 26 | 23 | 32 | 33 | 33 | 34 |
| Profit Before Tax | Stable | 137 | 170 | 141 | 164 | 153 | 151 | 137 | 144 | 142 | 144 |
| Tax | Stable | 29 | 40 | 36 | 43 | 43 | 43 | 32 | 38 | 36 | 33 |
| Net Profit | Stable | 108 | 131 | 104 | 120 | 109 | 108 | 105 | 106 | 106 | 110 |
| Net Margin | Stable | 3.3% | 5.2% | 3.4% | 5.7% | 3.7% | 4.1% | 3.7% | 4.9% | 4.2% | 5.0% |
Key Takeaways
- International Services delivered a constant currency (CC) revenue growth of 4.4% QoQ, though EBITDA was impacted by one-time cost items.
- The Domestic Business (Sonata Information Technology Ltd) saw a record performance with Gross Contribution increasing by 16.7% QoQ.
- Secured two significant large deals, including the company's first multi-million-dollar deal on Microsoft Fabric and a Gen AI modernization project.
- Consolidated PAT of ₹105 Crores remained relatively stable QoQ (-1.4%), while YoY figures show a sharp recovery from the net loss reported in Q3 FY24.
- The India segment continues to be the primary volume driver, contributing ₹184,140 lakhs to revenue this quarter, up significantly from ₹105,078 lakhs in Q2.
- Day Sales Outstanding (DSO) showed a slight uptick to 47 days in International and 41 days in Domestic, indicating a marginal slowdown in collections.
- Management is currently renegotiating contingent consideration terms for the Quant Systems acquisition, expected to conclude next quarter.
Management Guidance
Management remains optimistic about its 'Modernization Engineering' strategy and long-term vision, focusing on Gen AI and Microsoft Fabric to drive future growth.
Sentiment Shift
Stable
While top-line growth is robust and deal wins are healthy, the EBITDA margin compression in the International business due to one-time costs offsets the domestic strength.
Outlook
The company is transitioning toward high-value modernization services like Gen AI and Cloud. A key monitorable will be the margin recovery in International Services and the conclusion of the Quant Systems renegotiation.
From the Annual Report (Key Quotes)
“In Q3’25, our International business delivered 4.4%(CC) QoQ growth and EBIDTA drop due to onetime cost items.”
“We had one of our best quarter’s performances delivered in our Domestic Business during the quarter.”
“We won two large deals, our first multi-million-dollar deal on Microsoft Fabric, and for Gen AI modernization.”
Official Quarterly Documents
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This summary is AI-generated from Sonata Software Limited's latest quarterly filing and earnings call. For informational purposes only — not investment advice.