Sonata Software reported consolidated revenue of ₹3,279.1 crore for the quarter ended June 30, 2026, marking a 10.6% year-on-year increase from ₹2,965.2 crore in Q1FY26. Despite top-line growth, consolidated net profit after tax (PAT) contracted by 1.1% to ₹108.1 crore, primarily impacted by foreign exchange losses of ₹7.4 crore compared to a gain of ₹28 crore in the previous quarter. The Board of Directors, meeting on August 6, 2026, declared an interim dividend of ₹1.25 per equity share, payable on or after August 24, 2026, with a record date of August 14, 2026.

The results were reviewed under Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, by statutory auditors B S R & Co. LLP, who issued an unmodified review opinion. The company’s investor presentation highlighted a strategic shift towards "Engineering the AI Enterprise," with AI-led order book growing 27% quarter-on-quarter to $21.73 million and the AI-led pipeline expanding by 21% to $340 million. Management noted that cloud and data pipelines now constitute 51% of the total addressable market focus.

Segment Performance

Revenue growth was broad-based, with International IT Services rising 11.0% YoY to ₹777.2 crore and Domestic Products & Services growing 10.2% YoY to ₹2,505.6 crore. However, profitability metrics diverged between segments due to forex impacts and cost structures. Consolidated EBITDA before forex and other income grew 12.1% YoY to ₹179.0 crore, demonstrating operational leverage despite the net profit dip.

Note: EBITDA is before other income, forex, and exceptional items.

What the Numbers Show

A critical observation from the Q1FY27 results is the divergence between operational EBITDA growth and net profit performance. While consolidated EBITDA grew 12.1% YoY to ₹179.0 crore, indicating strong operational leverage, net profit contracted by 1.1%. This disconnect is largely attributable to foreign exchange movements; the current quarter included a forex loss of ₹7.4 crore, compared to a forex gain of ₹28 crore in Q4FY26. Furthermore, the Domestic segment demonstrated superior margin expansion, with EBITDA growing 34.9% YoY, outpacing its 10.2% revenue growth, suggesting improved cost efficiency or mix shift in the domestic business unit.

Operational Highlights

• International Business: Revenue in constant currency terms grew 2.1% YoY. Days Sales Outstanding (DSO) improved to 60 days from 62 days in Q1FY26. Return on Capital Employed (ROCE) stood at 14.9%. Seven new customers were added during the quarter. The onsite/offshore revenue mix shifted to 30:70, reflecting a continued move towards offshore delivery models.
• Domestic Business: Gross contribution grew 14.5% YoY to ₹78.5 crore. ROCE surged significantly to 57.7% from 33.6% in Q1FY26, reflecting high capital efficiency in this segment. DSO remained stable at 65 days. Cloud revenue constituted approximately 89.7% of domestic revenue, with annuity-based revenue at 80.0%.
• Balance Sheet: Cash and cash equivalents (gross) stood at ₹567.0 crore, with net cash at ₹67.0 crore. No exceptional items were recorded in the current quarter, unlike the prior year which included impairment losses and labour code impacts.

The company continues to monitor the finalization of Central and State Rules regarding the new Labour Codes notified in November 2025, which had resulted in exceptional charges in FY26. Management emphasized continued execution with operational rigor while focusing on AI-led modernization engineering services. Sonata also secured a key deal for AI-led legacy platform modernization with a major global beverage player based in the US West Coast, specializing in coffee and coffeehouse chains.

Sonata Software Limited shareholders have approved the company’s audited financial statements for the financial year ended March 31, 2026, alongside a final dividend of ₹4.15 per equity share. The resolutions were passed with overwhelming support at the 31st Annual General Meeting (AGM) held on July 31, 2026, via Video Conferencing and Other Audio-Visual Means (VC/OAVM). The high approval rates signal strong shareholder confidence in the company’s governance and financial direction.

The meeting was conducted in compliance with Regulation 44 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, and Section 108 of the Companies Act, 2013. Practising Company Secretary Maitri Bhat was appointed as the Scrutinizer by the Board of Directors via resolution dated May 7, 2026. National Securities Depository Limited (NSDL) provided the e-voting system for both remote e-voting and voting during the AGM. Remote e-voting commenced on July 27, 2026, at 9:00 AM and concluded on July 30, 2026, at 5:00 PM. As of the cut-off date of July 17, 2026, there were 2,07,905 equity shareholders entitled to vote.

Voting Results

Shareholders voted on three ordinary resolutions. The first resolution concerned the adoption of the Audited Financial Statements and Consolidated Financial Statements for FY26, including the reports of the Directors and Auditors. This resolution received 99.98% support, with 605 shareholders casting 20,08,98,404 votes in favor. Only 15 shareholders voted against, representing 43,995 votes or 0.02% of the total valid votes cast. No votes were declared invalid.

The second resolution sought confirmation of interim dividend payments of ₹3.75 per share already paid and the declaration of a final dividend of ₹4.15 per equity share. It was approved by 608 shareholders who cast 20,05,10,281 votes in favor, accounting for 99.78% of the valid votes. Thirteen shareholders opposed the resolution, casting 4,38,009 votes (0.22%). Again, no invalid votes were recorded.

The third resolution involved the appointment of Shyam Bhupatirai Ghia (DIN: 00005264) as a Director liable to retire by rotation. This resolution secured 90.22% support, with 548 shareholders casting 18,08,64,443 votes in favor. Seventy-two shareholders voted against, representing 1,96,11,699 votes or 9.78% of the total. No invalid votes were reported for this resolution either.

Governance and Compliance

The AGM was permitted under Ministry of Corporate Affairs General Circular No. 03/2025 dated September 22, 2025, which allows companies to hold meetings via VC/OAVM without physical presence. An advertisement notifying shareholders of the meeting was published in 'Business Standard' (English) and 'Navshakthi' (Marathi) on July 4, 2026, pursuant to Rule 20(4)(v) of the Companies (Management and Administration) Rules, 2014.

Sixty shareholders participated physically through the VC/OAVM platform. Key attendees included Chairperson Sanjay Asher, CEO Rajsekhar Datta Roy, and CFO Jagannathan C N. After the conclusion of e-voting, the votes were unblocked in the presence of two independent witnesses not employed by Sonata Software Limited. The votes were then counted based on data downloaded from the NSDL e-voting system. All voting records and related papers remain in the safe custody of the Scrutinizer until the Chairperson approves and signs the Minutes of the AGM, after which they will be handed over to the Company Secretary for safekeeping.