Anand Rathi has given Buy recommendation for Sonata Software with a target price of Rs. 1050 in its research report issued on Jan 19, 2022

Anand Rathi’s research report on Sonata Software

Sonata delivered $53.4m IT Services Q3 revenue, up 5.5% q/q (organic est.), 21% y/y, accelerating from Q2. Net hiring was 175, utilisation went up to 90% on supply crunch. Q3 Services revenue was driven by demand in the CPG/Retail and OPD/ISV verticals, Sonata’s strongholds. The Domestic business ($198m, up 32% y/y) continues to shine. IT Services margins were flattish q/q, adj. for forex, and after absorbing Q3 wage rises.

We, however, trim FY22e/23e profit ~5%/4%, easing expectations of margin expansion and slower recovery in Travel. We revise our target to Rs.1,050 (from Rs.1,070), 21x FY24 EPS.

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At 16:00 hrs Sonata Software was quoting at Rs 819.80, down Rs 39.70, or 4.62 percent.

It has touched an intraday high of Rs 875.00 and an intraday low of Rs 786.35.

It was trading with volumes of 20,705 shares, compared to its thirty day average of 15,706 shares, an increase of 31.83 percent.

In the previous trading session, the share closed down 0.81 percent or Rs 7.00 at Rs 859.50.

The share touched its 52-week high Rs 1,030.00 and 52-week low Rs 353.95 on 20 October, 2021 and 01 February, 2021, respectively.

Currently, it is trading 20.41 percent below its 52-week high and 131.61 percent above its 52-week low.

Market capitalisation stands at Rs 8,620.96 crore.

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