Sonata Software Limited – Investor Presentation Summary

Key Operational Highlights

  • Total headcount: 6,293 employees (Q1 FY27)
  • International Services headcount: 5,795 employees (Delivery: 5,409, S&M: 104, G&A: 282)
  • Domestic Business headcount: 498 employees (Delivery: 370, S&M: 124, G&A: 4)
  • International Services utilization rate: 88.5% (Q1 FY27)
  • International Services LTM attrition: 13% (Q1 FY27)
  • International Services onsite-offshore revenue mix: 30:70 (Q1 FY27)
  • 100% Tier 1 suppliers are ESG compliant and trained
  • Sustainability Target: Net Zero Emission by 2050
  • UNGC Signatory

Key drivers of operational performance: AI-led transformation services, deep client relationships, scalable new clients, early wins on AI implementation

Segment-wise Performance

International Services:

  • Revenue: $82.0 million (₹777.2 Cr)
  • QoQ Growth: -0.5% ($ terms), -0.3% (₹ terms)
  • YoY Growth: 0.3% ($ terms), 11.0% (₹ terms)
  • EBITDA before forex & OI: ₹119.6 Cr (15.4% margin)
  • EBITDA after forex & OI: ₹114.4 Cr (14.7% margin)
  • PAT: ₹62.2 Cr (8.0% margin)
  • Effective tax rate: 17.0%
  • ROCE: 14.9%
  • RONW: 15.2%
  • DSO: 60 days

Domestic Business:

  • Revenue: ₹2,505.6 Cr
  • QoQ Growth: 42.4%
  • YoY Growth: 10.1%
  • Gross Contribution: ₹78.5 Cr
  • EBITDA before forex & OI: ₹59.3 Cr (2.4% margin)
  • EBITDA after forex & OI: ₹65.7 Cr (2.6% margin)
  • PAT: ₹45.9 Cr (1.8% margin)
  • Effective tax rate: 26.1%
  • ROCE: 57.7%
  • RONW: 42.7%
  • DSO: 65 days
  • Net working capital/GC: 0.87

Explanation of significant changes in segment performance: International Services showed stable revenue with margin pressure, while Domestic Business demonstrated strong revenue growth of 42.4% QoQ

Financial Highlights

Consolidated Performance:

  • Revenue: ₹3,279.1 Cr
  • QoQ Growth: 29.3%
  • YoY Growth: 10.6%
  • EBITDA before forex & OI: ₹179.0 Cr (5.5% margin)
  • EBITDA after forex & OI: ₹177.5 Cr (5.4% margin)
  • PAT: ₹108.1 Cr (3.3% margin)
  • Effective tax rate: 21.1%
  • EPS: ₹3.90
  • Cash and equivalents: ₹567.0 Cr
  • ROCE: 21.9%
  • RONW: 20.9%

YoY/QoQ comparison: PAT decreased 17.1% QoQ from ₹130.5 Cr in Q4 FY26 to ₹108.1 Cr in Q1 FY27

Drivers of financial performance: International Services revenue growth offset by margin compression, strong Domestic Business revenue growth

Key Risks: Not explicitly disclosed in presentation

Geographical Revenue Split

International Services Geography Mix (Q1 FY27):

  • USA: 71% of revenue
  • Europe: 23% of revenue
  • ROW: 6% of revenue

Domestic vs Export/Regional Revenue:

  • International Services (Export): ₹777.2 Cr (23.7% of total consolidated revenue)
  • Domestic Business: ₹2,505.6 Cr (76.3% of total consolidated revenue)

Regional Breakdown: Not specified beyond geographic percentages

Balance Sheet Snapshot

  • Cash and equivalents: ₹567.0 Cr
  • Cash & net cash position: ₹67.0 Cr

Financial Health Insights: Strong cash position with ₹567.0 Cr cash equivalents

Capex & Cash Flow Health

Capital Expenditure: Not specified

Free Cash Flow: Not specified

Operating Cash Flow: Not specified

Net Debt Movement: Not specified

Investment Rationale: Not specified

Strategic & R&D Initiatives

Investments in Innovation: AI portfolio development – Engineering the AI Enterprise, alliances with globally renowned innovation & knowledge ecosystem, collaboration on agentic AI research

Expected impact on growth: AI delivering enterprise velocity and outcomes with demonstrated results including 71% faster service operations, 50% faster implementation, 99%+ AI accuracy, 33% faster modernization

Strategic Rationale: Fostering innovation and research in emerging field of agentic AI, advancing AI-driven scientific research, promoting educational outreach, upgrading infrastructure, incubating AI startups

Industry Trends & Business Environment

Macro/Industry Trends: Growing adoption of AI-led transformation across industries

Impact on Company: Positioning as AI enterprise enabler with demonstrated ability to convert AI into measurable business value across customer engagement, enterprise operations, regulated workflows and engineering transformation

Management Commentary & Growth Outlook

Strategic Outlook: Deep client relationships, scalable new clients, early wins on AI

FY Guidance: Not explicitly provided

Market Share Targets: Not specified

Risks and Opportunities: Not explicitly highlighted

Additional Business Highlights

Microsoft-Sonata 360 Degree Partnership: 30+ years of collaboration

Key Verticals: TMT (34%), Retail & Manufacturing (32%), Healthcare (15%), BFSI (16%), Others (3%)

Service Lines: Cloud (62%), Dynamics (21%), Data (11%), Others (3%), Emerging (3%)

Customer Metrics: Revenue from Top 10 clients – 51%, Revenue from Top 20 clients – 70%, 7 new customers added in Q1 FY27

Deal Metrics: Book-to-bill ratio of 1.18x