Sonata Software Share Price Falls To Nearly Two-Year Low After Weak Third-Quarter Earnings

Sonata Software Ltd. experienced a significant decline in its share price, dropping by 19.13%, hitting nearly two-year low on Friday following the release of its third-quarter earnings report. The company’s financial performance for the quarter revealed mixed results, leading to investor concerns.

For the third quarter, Sonata Software reported a net profit of Rs 105 crore, down 1.4% from Rs 106 crore in the previous quarter. Despite this, the company’s revenue saw an increase of 31%, rising to Rs 2,843 crore from Rs 2,170 crore. However, the earnings before interest and taxes fell by 9% to Rs 131 crore, compared to Rs 144 crore in the previous quarter. The EBIT margin also declined to 4.6% from 6.7%.

The weak earnings report led to a sharp decline in Sonata Software’s share price.

Sonata Software is a global IT services company headquartered in Bangalore, India. It specialises in providing IT solutions and services, including software development, cloud services, and digital transformation. The company serves a diverse range of industries such as retail, manufacturing, and travel, leveraging its expertise in platforms like Microsoft Dynamics and SAP.

The scrip fell as much as 19.13% to Rs 446.10 apiece. It pared losses to trade 14.43% lower at Rs 472 apiece, as of 09:38 a.m. This compares to a flat NSE Nifty 50 Index.

It has risen 41% in the last 12 months. The relative strength index was at 28.

Out of 10 analysts tracking the company, eight maintain a 'buy' rating, and two recommend a 'hold,' according to Bloomberg data. The average 12-month consensus price target implies an upside of 52.5%