NOT FOR DISTRIBUTION
Header cover image

Market Cap

₹61.3b

Last Updated

2021/04/12 12:11 UTC

Data Sources

Company Financials +

Executive Summary

Sonata Software Limited, together with its subsidiaries, provides information technology services and solutions in India, the United States, Europe, Australia, and the Middle East. More Details


Snowflake Analysis

Excellent balance sheet average dividend payer.

Share Price & News

How has Sonata Software's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: SONATSOFTW is not significantly more volatile than the rest of Indian stocks over the past 3 months, typically moving +/- 7% a week.

Volatility Over Time: SONATSOFTW's weekly volatility (7%) has been stable over the past year.


Market Performance


7 Day Return

9.7%

SONATSOFTW

0.4%

IN IT

-2.4%

IN Market


1 Year Return

222.4%

SONATSOFTW

106.4%

IN IT

66.7%

IN Market

Return vs Industry: SONATSOFTW exceeded the Indian IT industry which returned 106.4% over the past year.

Return vs Market: SONATSOFTW exceeded the Indian Market which returned 66.7% over the past year.


Shareholder returns

SONATSOFTWIndustryMarket
7 Day9.7%0.4%-2.4%
30 Day13.8%4.9%-4.1%
90 Day35.1%1.4%1.3%
1 Year226.1%222.4%109.5%106.4%69.3%66.7%
3 Year96.3%72.1%120.9%107.7%21.1%15.1%
5 Year359.9%274.8%162.5%137.6%76.9%63.4%

Long-Term Price Volatility Vs. Market

How volatile is Sonata Software's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Sonata Software undervalued compared to its fair value and its price relative to the market?

27.51x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: SONATSOFTW (₹573) is trading above our estimate of fair value (₹284.88)

Significantly Below Fair Value: SONATSOFTW is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: SONATSOFTW is poor value based on its PE Ratio (27.5x) compared to the IN IT industry average (23.6x).

PE vs Market: SONATSOFTW is poor value based on its PE Ratio (27.5x) compared to the Indian market (18.1x).


Price to Earnings Growth Ratio

PEG Ratio: SONATSOFTW is poor value based on its PEG Ratio (1.3x)


Price to Book Ratio

PB vs Industry: SONATSOFTW is overvalued based on its PB Ratio (7.6x) compared to the IN IT industry average (1.2x).


Future Growth

How is Sonata Software forecast to perform in the next 1 to 3 years based on estimates from 3 analysts?

21.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: SONATSOFTW's forecast earnings growth (21.1% per year) is above the savings rate (7%).

Earnings vs Market: SONATSOFTW's earnings (21.1% per year) are forecast to grow slower than the Indian market (24.5% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: SONATSOFTW's revenue (9% per year) is forecast to grow slower than the Indian market (14.1% per year).

High Growth Revenue: SONATSOFTW's revenue (9% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: SONATSOFTW's Return on Equity is forecast to be high in 3 years time (34.1%)


Past Performance

How has Sonata Software performed over the past 5 years?

13.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: SONATSOFTW has high quality earnings.

Growing Profit Margin: SONATSOFTW's current net profit margins (5.5%) are lower than last year (7.7%).


Past Earnings Growth Analysis

Earnings Trend: SONATSOFTW's earnings have grown by 13.3% per year over the past 5 years.

Accelerating Growth: SONATSOFTW's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: SONATSOFTW had negative earnings growth (-20.6%) over the past year, making it difficult to compare to the IT industry average (-3.7%).


Return on Equity

High ROE: SONATSOFTW's Return on Equity (27.6%) is considered high.


Financial Health

How is Sonata Software's financial position?


Financial Position Analysis

Short Term Liabilities: SONATSOFTW's short term assets (₹13.5B) exceed its short term liabilities (₹9.3B).

Long Term Liabilities: SONATSOFTW's short term assets (₹13.5B) exceed its long term liabilities (₹1.1B).


Debt to Equity History and Analysis

Debt Level: SONATSOFTW's debt to equity ratio (15.3%) is considered satisfactory.

Reducing Debt: SONATSOFTW's debt to equity ratio has increased from 14.3% to 15.3% over the past 5 years.

Debt Coverage: SONATSOFTW's debt is well covered by operating cash flow (447.7%).

Interest Coverage: SONATSOFTW's interest payments on its debt are well covered by EBIT (63.1x coverage).


Balance Sheet


Dividend

What is Sonata Software current dividend yield, its reliability and sustainability?

3.14%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: SONATSOFTW's dividend (3.14%) is higher than the bottom 25% of dividend payers in the Indian market (0.43%).

High Dividend: SONATSOFTW's dividend (3.14%) is in the top 25% of dividend payers in the Indian market (1.91%)


Stability and Growth of Payments

Stable Dividend: SONATSOFTW's dividend payments have been volatile in the past 10 years.

Growing Dividend: SONATSOFTW's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: Unable to calculate sustainability of dividends as SONATSOFTW has not reported any payouts.


Future Payout to Shareholders

Future Dividend Coverage: SONATSOFTW's dividends in 3 years are forecast to be covered by earnings (54.5% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

3.9yrs

Average management tenure


CEO

Palem Reddy (62 yo)

9.17yrs

Tenure

₹39,700,000

Compensation

Mr. Palem Srikar Reddy, BE (Electrical), PGDBM (IIM), has been the Managing Director and Chief Executive Officer of Sonata Software Limited since February 14, 2012. Mr. Reddy serves as an Executive Directo...


CEO Compensation Analysis

Compensation vs Market: Palem's total compensation ($USD531.12K) is above average for companies of similar size in the Indian market ($USD381.05K).

Compensation vs Earnings: Palem's compensation has been consistent with company performance over the past year.


Leadership Team

Experienced Management: SONATSOFTW's management team is considered experienced (3.9 years average tenure).


Board Members

Experienced Board: SONATSOFTW's board of directors are considered experienced (7.4 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: SONATSOFTW insiders have only sold shares in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Sonata Software Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Sonata Software Limited
  • Ticker: SONATSOFTW
  • Exchange: NSEI
  • Founded: 1994
  • Industry: IT Consulting and Other Services
  • Sector: Software
  • Market Cap: ₹61.269b
  • Shares outstanding: 103.91m
  • Website: https://www.sonata-software.com

Number of Employees


Location

  • Sonata Software Limited
  • 1/4, APS Trust Building
  • Bull Temple Road
  • Bengaluru
  • Karnataka
  • 560004
  • India

Listings


Biography

Sonata Software Limited, together with its subsidiaries, provides information technology services and solutions in India, the United States, Europe, Australia, and the Middle East. It also offers software ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/04/12 12:11
End of Day Share Price2021/04/12 00:00
Earnings2020/12/31
Annual Earnings2020/03/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.