Sonata Software surges 26% in one month; stock nears record high
Published On: Monday, February 20, 2023 | By: Team KnowMyStock
Shares of Sonata Software gained 11 percent on the BSE in Monday's intra-day trade amid heavy volumes. hitting a fresh 52-week high of Rs 753. Sonata Software breached its earlier 52-week high of Rs 689.95 which it touched on Friday, February 16, 2023. In the past month, Sonata Software has outperformed the market by surging 25 to 30 percent after the company reported a strong financial performance for the quarter that ended December 2022(Q3FY23). Sonata offers IT services (30 percent) and product licensing & deployment (70 percent). The company provides IT services to travel, retail, agri & commodities, and manufacturing and software vendors. The company is net debt free and has a healthy double-digit return ratio (with RoCE of over 30 percent). Sonata Software’s IT services dollar revenues grew 4.7 percent sequentially and 3.9 percent in constant currency (CC) terms, while it closed four large deals in the third quarter of FY23.
Ebitda (earnings before interest, taxes, depreciation, and amortization) margins in IT services declined 70 bps QoQ to 25.2 percent due to elevated employee cost and increased marketing spending in Q3. The company's consolidated profit after tax jumped 20 percent YoY and 4 percent QoQ at Rs 117.60 crore.
The new CEO Samir Dhir has announced a plan to double IT services revenue in four years which will be aided by large deal momentum, according to Sameer Pardikar, an analyst at ICICI Securities.
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