Anand Rathi's research report on Sonata Software
Sonata’s IT services revenue was $58m (TTM $224m), up 2% q/q (4% cc), 14% y/y organic ($ terms, est.) and ~20% cc. Headcount (up 16% y/y) addition shot up to 406 (300 freshers) from just 36 last quarter. The margin was 23.5%, up 108bps q/q, with the bulk of the cost pressures behind. The company will continue to invest in building the sales team but not much pressure on margins is anticipated ahead as investments will be gradual. DSOs went up but are still within the medium-term range. The India business continued on high growth.
Outlook
We increase estimates ~5%; target retained at Rs.660 (bonus adjusted), 15x FY25e.
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