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Buy Sonata Software; target of Rs 660: Anand Rathi

Anand Rathi is bullish on Sonata Software has recommended buy rating on the stock with a target price of Rs 660 in its research report dated October 19, 2022.

October 20, 2022 / 10:08 PM IST
 
 
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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.

For all recommendations report, click here

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Sonata Software - 201022 -anand

Broker Research
first published: Oct 20, 2022 10:08 pm

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