Sonata Software Limited (NSE:SONATSOFTW) Just Released Its Annual Results And Analysts Are Updating Their Estimates

There's been a notable change in appetite for Sonata Software Limited (NSE:SONATSOFTW) shares in the week since its yearly report, with the stock down 13% to ₹366. It was a workmanlike result, with revenues of ₹102b coming in 2.7% ahead of expectations, and statutory earnings per share of ₹15.28, in line with analyst appraisals. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Sonata Software after the latest results.

We've discovered 2 warning signs about Sonata Software. View them for free.

Following the latest results, Sonata Software's eight analysts are now forecasting revenues of ₹110.1b in 2026. This would be an okay 7.6% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to surge 31% to ₹19.98. Before this earnings report, the analysts had been forecasting revenues of ₹112.1b and earnings per share (EPS) of ₹24.12 in 2026. So there's definitely been a decline in sentiment after the latest results, noting the real cut to new EPS forecasts.

Check out our latest analysis for Sonata Software

The consensus price target held steady at ₹602, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Sonata Software analyst has a price target of ₹760 per share, while the most pessimistic values it at ₹330. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that Sonata Software's revenue growth is expected to slow, with the forecast 7.6% annualised growth rate until the end of 2026 being well below the historical 21% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 6.4% annually. Factoring in the forecast slowdown in growth, it looks like Sonata Software is forecast to grow at about the same rate as the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. The consensus price target held steady at ₹602, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Sonata Software analysts - going out to 2028, and you can see them free on our platform here.

Even so, be aware that Sonata Software is showing 2 warning signs in our investment analysis , you should know about...

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.