Sonata Software Q2 Review — Long-Term Story Remains Intact, Says IDBI Capital Maintaining 'Hold'

Management expects H2 FY26 to be stronger with revenue uplift from large healthcare/TMT deals, AI-led wins and BFSI recovery post Q3. Technology, media, telecom new spending expected to revive post budget dissemination in early 2026. Sonata Software remains confident of maintaining 1.2–1.3x book-to-bill and delivering continued Ebitda improvement..NDTV Profit’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 NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..IDBI Capital Report.Sonata Software Ltd. demonstrated a resilience performance with reported consolidated revenue at Rs 2,119 crore, reflecting a 2.3% YoY decline but stable order book growth with a book-to-bill ratio of 1.28x. International services revenue grew 3.2% YoY to $82 million, driven by strong demand in Healthcare, BFSI, and TMT verticals. Ebitda margin expanded by 70 bps QoQ to 17.3%, supported by higher utilization (87.3%), planned large-deal offshoring, and AI-led productivity improvements, partially offsetting salary inflation impact. Sonata secured one large multi-year healthcare deal and several mid-sized AI/CSP deals, boosting the AI order book to 10% of total order book value. Domestic business faced a 4.8% YoY decline but gross contribution improved marginally. Sonata’s strategy focuses on AI modernization, scale in key verticals, and diversification across geographies, maintaining a strong pipeline despite headwinds from specific large clients. The company declared an interim dividend of Rs 1.25 per share in line with quarterly payout policy. Overall, Sonata is on a steady growth trajectory with continued AI integration fueling operational efficiency and client acquisition. We maintain our rating to Hold, valuing the stock at 21.2x FY27E EPS with a same target price of Rs 435..Click on the attachment to read the full report:.Jubilant Foodworks Shares Can Rally 22% Says ICICI Securities Post Strong Q2 — Check New Target Price .DISCLAIMERThis report is authored by an external party. NDTV Profit 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 NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Sonata Software Q2 Review — Long-Term Story Remains Intact, Says IDBI Capital Maintaining 'Hold'

Sonata is on a steady growth trajectory with continued AI integration fueling operational efficiency and client acquisition, adds the brokerage.

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