Sonata Software - Changing Orbit: HDFC Securities

BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy. .HDFC Securities Institutional Equities .Sonata Software Ltd. announced its largest acquisition of Quant Systems, which involves a cash payout of $65 million and an earn-out of $95 million payable over the next two years. The deal is valued at price/sales of 4.3 times (1.8 times excluding earnout), which we believe is on the higher side but it is justified by Quant’s- high growth profile (three year organic compound annual growth rate of 113%);superior margin of more than 25%; excellent partnership network (Salesforce, AWS, Adobe, Snowflakes, etc.); and domain capabilities in the banking, financial services and insurance and healthcare verticals. The acquisition is in line with management’s target to double IITS revenue (hit half a billion) in four years (organic CAGR of ~15%), supported by higher investments in new verticals and geographies and expanding partnerships beyond Microsoft. The acquisition will also add two new clients to the top-five list of Sonata’s and will help expand its presence in the BFSI and healthcare verticals. We like Sonata based on-growth acceleration in IITS;strong Microsoft relationship;new CEO focus on improving sales engine;continued growth in divided per share; and high return on equity of more than 35%..Click on the attachment to read the full report:.Sonata - Aiming To Reach Half A Billion-$ IT Services Revenue By FY26/27, Acquires Quant Systems: ICICI Direct.DISCLAIMERThis report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Sonata Software - Changing Orbit: HDFC Securities

Sonata Software announced its largest acquisition of Quant Systems, which involves a cash payout of $65 million.

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