Sonata Software Ltd

NSE: SONATSOFTW BSE: 532221

₹322.45

(4.39%)

Sun, 09 Aug 2026, 08:57 pm

Market Cap (in Cr)9032.48

PE Ratio19.26

Dividend2.45

Technology Services

Information Technology Services

24.5K

Sonata Software Analysis

Pros

Dividends per share have increased over the past 10 years.
Dividends after 3 years are expected to be covered by earnings (1.6x coverage).
Sonata Software's pays a higher dividend yield than the bottom 25% of dividend payers in India (0.76%).
Sonata Software's dividend is above the markets top 25% of dividend payers in India (3.08%).

Cons

Dividends paid are not well covered by earnings (0.9x coverage).
Dividends per share have been volatile in the past 10 years (annual drop of over 20%).

Pros

Sonata Software is expected to efficiently use shareholders’ funds in the future (Return on Equity greater than 20%).
Performance (ROE) is expected to be above the current IN IT industry average.

Cons

Cash flow for Sonata Software is expected to decrease over the next 2 years.
Sonata Software's earnings are expected to decrease over the next 1-3 years, this is not considered high growth.
Sonata Software's earnings are expected to decrease over the next 1-3 years, this is below the India market average.
Sonata Software's earnings are expected to decrease over the next 1-3 years, this is below the low risk savings rate of 7.2%.
Sonata Software's earnings are expected to decrease over the next year.
Sonata Software's net income is expected to decrease over the next 2 years.
A decline in Sonata Software's performance (ROE) is expected over the next 3 years.
Sonata Software's revenue is expected to increase but not above the 50% threshold in 2 years time.
Sonata Software's revenue is expected to grow by 3.6% yearly, however this is not considered high growth (20% yearly).
Sonata Software's revenue growth is positive but not above the India market average.

Pros

Sonata Software is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
Sonata Software is profitable, therefore cash runway is not a concern.
Sonata Software is profitable, therefore cash runway is not a concern.
Debt is well covered by operating cash flow (429.9%, greater than 20% of total debt).
Debt is covered by short term assets, assets are 13.8x debt.
Sonata Software's cash and other short term assets cover its long term commitments.
Interest payments on debt are well covered by earnings (EBIT is 22.2x coverage).
Sonata Software's level of debt (12.8%) compared to net worth is satisfactory (less than 40%).
Low level of unsold assets.

Cons

The level of debt compared to net worth has increased over the past 5 years (5.7% vs 12.8% today).

Pros

The tenure for the Sonata Software board of directors is about average.
Palem's compensation has been consistent with company performance over the past year, both up more than 20%.
The tenure for the Sonata Software management team is about average.

Cons

Palem's remuneration is higher than average for companies of similar size in India.

Pros

Cons

Pros

Sonata Software's year on year earnings growth rate has been positive over the past 5 years.
Sonata Software used its assets more efficiently than the IN IT industry average last year based on Return on Assets.
Sonata Software has significantly improved its use of capital last year versus 3 years ago (Return on Capital Employed).
Sonata Software made outstanding use of shareholders’ funds last year (Return on Equity greater than 40%).
Sonata Software's earnings growth has exceeded the IN IT industry average in the past year (11.1% vs 6%).

Cons

Sonata Software's 1-year earnings growth is less than its 5-year average (11.1% vs 15.9%)

Pros

Sonata Software is good value based on earnings compared to the IN IT industry average.
Sonata Software is good value based on earnings compared to the India market.
NSEI:SONATSOFTW is up 24.2% outperforming the IT industry which returned 8.5% over the past month.
NSEI:SONATSOFTW is up 24.2% outperforming the market in India which returned 8% over the past month.

Cons

Sonata Software's share price is below the future cash flow value, but not at a moderate discount (< 20%).
Sonata Software's share price is below the future cash flow value, but not at a substantial discount (< 40%).
Sonata Software is overvalued based on assets compared to the IN IT industry average.
Sonata Software earnings are not expected to grow next year, we can't assess if its growth is good value.
SONATSOFTW underperformed the IT industry which returned -10.1% over the past year.
SONATSOFTW underperformed the Market in India which returned -14.5% over the past year.