Sonata Software Limited has released the transcript of its analyst and investor conference call for the quarter and fiscal year ended March 31, 2026. The disclosure, submitted in compliance with Regulation 46(2)(oa) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, provides detailed insights into the company's financial performance and strategic outlook.

Financial Performance Overview

For the fourth quarter of FY2026, the company reported a consolidated revenue of Rs.2,536.2 Crores, a degrowth of 17.7% quarter-on-quarter and 3.1% year-on-year. Profit After Tax (PAT) for the quarter stood at Rs.130.5 Crores, marking a growth of 25% quarter-on-quarter and 21.4% year-on-year. For the full fiscal year FY2026, consolidated revenue reached Rs.10,701.2 Crores with a growth of 5.4% year-on-year, while PAT increased to Rs.464.4 Crores from Rs.424.7 Crores in the previous year.

The board has recommended a final dividend of Rs.4.15 per share. The consolidated EPS for FY2026 was reported at 16.74 per share compared to 15.3 per share in the previous year.

Segment Performance and Operational Metrics

The International Services business reported a constant currency revenue growth of 0.6% quarter-on-quarter, with USD revenue at $82.4 million. The segment achieved an EBITDA margin of 20.2% for Q4 FY2026, an improvement of 70 basis points from the previous quarter, driven by operational efficiencies and AI adoption. The AI-led order book for the year stood at $49 million, contributing 18% to the total order book, with a pipeline of $280 million.

The Domestic Business reported revenue of Rs.1,759.2 Crores for Q4 FY2026. Despite headwinds from a large client renewal, the segment posted a PAT of Rs.46.3 Crores, growing 3.9% quarter-on-quarter. Management indicated that the impact of the client loss has been largely covered.

The following table summarizes key operational metrics for Q4 FY2026:

Strategic Guidance and Outlook

Management expressed cautious optimism regarding the medium-term growth trajectory, expecting gradual improvement driven by AI-led initiatives. The company aims to maintain EBITDA levels similar to the current performance while remaining open to strategic investments for future growth, particularly in AI transformation.

For the domestic business, the management expects a return to the growth trajectory during FY27, supported by new customer additions and diversified service offerings. Key verticals expected to drive growth in the coming fiscal year include Technology, Media & Telecom (TMT), Healthcare & Life Sciences (HLS), and Banking, Financial Services & Insurance (BFSI), with the Retail, Manufacturing & Distribution (RMD) vertical also recovering.

The filing confirmed that the transcript is available on the company's investor relations website. The disclosure was signed by Mangal Kulkarni, Company Secretary and Compliance Officer, on May 18, 2026.

Sonata Software Limited has filed its audited financial results for the quarter and year ended 31st March 2026 with the National Stock Exchange of India Limited and BSE Limited, pursuant to Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The results were approved by the Board of Directors at their meeting held on 7th May 2026 and subsequently published in "Navshakthi" (regional newspaper) and the all-India edition of "Business Standard" (English daily) on 8th May 2026. The company has also declared a final dividend of ₹4.15 per share (415% on par value of ₹1/-) for FY26, subject to shareholder approval at the ensuing Annual General Meeting.

Financial Highlights

Sonata Software reported a consolidated net profit after tax (attributable to owners) of ₹13,050 lakhs for Q4 FY26, compared to ₹10,753 lakhs in Q4 FY25, reflecting year-on-year growth. Consolidated total income from operations stood at ₹2,53,619 lakhs in Q4 FY26, against ₹2,61,720 lakhs in Q4 FY25. For the full year FY26, consolidated net profit attributable to owners was ₹46,439 lakhs versus ₹42,467 lakhs in FY25. EBITDA improved to ₹2.08B from ₹1.7B YoY, with EBITDA margin expanding to 8.23% from 6.60% YoY. On a sequential basis, consolidated PAT grew 25.00% QoQ. The board has recommended a final dividend of ₹4.15 per share (415%) for FY26.

The table below summarises the key consolidated financial metrics:

Standalone Financial Performance

On a standalone basis, Sonata Software reported total income from operations of ₹41,071 lakhs for Q4 FY26, compared to ₹26,567 lakhs in Q4 FY25 and ₹37,108 lakhs in Q3 FY26. Net profit after tax attributable to owners stood at ₹7,623 lakhs in Q4 FY26, against ₹1,800 lakhs in Q4 FY25. For the full year FY26, standalone net profit was ₹27,873 lakhs versus ₹21,377 lakhs in FY25. Standalone basic and diluted EPS for Q4 FY26 stood at ₹2.75, and for the full year FY26 at ₹10.05.

Exceptional Items

The audited results include two significant exceptional items for the quarter and year ended 31st March 2026. First, Sonata Software North America Inc. (a wholly owned subsidiary) initiated proceedings against one of its customers, and the Group created an allowance for expected credit losses towards the entire outstanding receivables from that customer as at 31st March 2026, amounting to ₹9,695 lakhs (USD 10.64 Mn). This has been disclosed as an exceptional item given its materiality, non-recurring nature, and litigative character. Management, in consultation with legal advisors, is actively engaged in monitoring the matter and taking appropriate actions to protect the Group's interests.

Second, the Group and the selling shareholder of Sonata Software Solutions North America, Inc. (formerly known as Quant Systems Inc.) finalised the payout terms of contingent consideration for the year ended 31st December 2024 via an amendment to the purchase agreement on 18th May 2025. An amount of ₹6,538 lakhs (USD 6.89 Mn) that was payable to the selling shareholder has been concluded as not payable, and accordingly the liability has been written back as an exceptional item.

Leadership Change

The company announced a key leadership transition during the period. Upon expiration of his term on 8th May 2026, Mr. Samir Dhir (DIN: 03021413) ceased to hold office as Managing Director & Chief Executive Officer. He also resigned from the position of Executive Director with effect from the close of business hours on 8th May 2026. The Board took note of this at its meeting held on 25th April 2026 and appointed Mr. Rajsekhar Datta Roy as the Chief Executive Officer of the Company with effect from 9th May 2026.

International Services Performance

The international services segment demonstrated notable momentum in Q4 FY26. The company won two large deals during the quarter — one in Fintech & Payments (US) focused on Platform & Data Modernization, and another with a PE Company (US) for Modern Engineering. BFSI and HLS verticals continued to remain stable, while the US geography scaled steadily. The revenue composition for International Services in Q4 FY26 reflected a shift toward Cloud and TMT verticals, as detailed below:

For the full year FY26, Cloud accounted for 48% of International Services revenue, compared to 39% in FY25, reflecting the company's increased focus on Cloud and Data capabilities.

Domestic Business Performance

The domestic business reported mixed trends in Q4 FY26. Cloud contributed approximately 90.2% of domestic revenue, with annuity revenue at approximately 89.3%. Revenue grew 25.1% QoQ, while Gross Contribution grew 1.0% QoQ, EBITDA grew 8.8% QoQ, and PAT grew 1.6% QoQ. DSO for the domestic business stood at 47 days in Q4 FY26, compared to 42 days in Q3 FY26 and 46 days in Q4 FY25.

Workforce and Operational Metrics

As of Q4 FY26, total headcount including the domestic business stood at 6,283. The company's ROCE and RONW metrics for the international business showed improvement across quarters, with ROCE at 24.5% and RONW at 30.3% in Q4 FY26, compared to 18.7% and 23.1% respectively in Q3 FY26, and 16.3% and 19.3% in Q4 FY25.

Strategic Positioning and Partnerships

Sonata Software continues to position itself as a modernization engineering firm, with four strategic pillars guiding its operations. The company has a 30+ year partnership with Microsoft and was named again in the Inner Circle for Microsoft Business Application 2025-26. Key highlights of the Microsoft partnership include:

• $650+ Million per annum revenue contribution to Microsoft
• 3,500+ team members on Microsoft technologies
• 400+ clients across the globe spanning USA, Europe, Asia, India, Australia, and Middle East
• 10 Advanced Specializations in Dynamics 365, Data Analytics, Teams, CAF, M365, Azure, and Copilot
• Recognized as Microsoft Cloud Solution Partner — Azure Expert MSP

The full format of the audited financial results is available on the company's website at www.sonata-software.com and on the websites of BSE Limited and National Stock Exchange of India Limited.