Sonata Software Reports Mixed Q2 Results: Higher Profit Despite Revenue Dip

Sonata Software , a leading Modernization Engineering Company, has reported mixed results for the second quarter. The company saw an increase in profitability despite a decline in revenue, showcasing resilience in a challenging market environment.

Key Financial Highlights

Metric	Value	Change
Consolidated Revenue	₹2,119.30 crore	down 28.5% QoQ
Consolidated Net Profit	₹120.20 crore	up 10% QoQ
EBITDA Margin	8.1%	up 280 basis points QoQ
Earnings Per Share (EPS)	₹4.33	up 9.9% QoQ

Segment-wise Performance

International IT Services

Metric	Value	Change
Revenue	$82.00 million	up 0.2% QoQ, 1% in constant currency
Rupee Revenue	₹730.30 crore	up 4.3% QoQ
EBITDA Margin	17.3%	up 70 basis points QoQ
Net Profit	₹78.00 crore	up 10.3% QoQ

Domestic Products & Services

Metric	Value	Change
Revenue	₹1,391.30 crore	down 38.8% QoQ
Gross Contribution	₹68.70 crore	up 0.3% QoQ
EBITDA Margin	3.3%	up 140 basis points QoQ
Net Profit	₹42.20 crore	up 9.3% QoQ

Strategic Developments

Sonata Software has made significant strides in its strategic initiatives:

Large Deal Win: Secured a major contract in the healthcare vertical, reinforcing the company's focus on large deals and consistent execution.
AI-led Growth: AI-led orders accounted for approximately 10% of the overall order book for the quarter, reflecting the company's successful investments in Artificial Intelligence.
Customer Acquisition: Added 6 new customers in the International IT Services segment during the quarter.
Microsoft Partnership: Continued execution of the three-pillar strategy focusing on the Microsoft SMC sector, AI-led partnerships with ISVs, and large system integration deals.

Management Commentary

Mr. Samir Dhir, MD & CEO of Sonata Software, expressed confidence in the company's trajectory, stating, "As clients accelerate AI-enabled modernization to enhance competitiveness, we remain confident in the company's long-term growth trajectory."

Mr. Sujit Mohanty, MD & CEO of Sonata Information Technology Limited, highlighted the company's resilience, saying, "Despite prevailing industry headwinds in certain sectors, our disciplined execution and focused investments continue to position us well for sustained growth."

Dividend Announcement

Sonata Software has declared a second interim dividend of ₹1.25 per share.

Outlook

While the revenue decline in the domestic segment presents challenges, Sonata Software's improved profitability and strategic focus on AI and large deals indicate a robust foundation for future growth. The company's ability to enhance margins and secure new clients in a competitive landscape demonstrates its adaptability and strong market positioning.

1 Day	5 Days	1 Month	6 Months	1 Year	5 Years
-0.87%	+6.44%	+7.17%	-2.65%	-32.15%	+199.68%

Sonata Software , a leading IT services and technology solutions company, has announced a significant strategic move in the artificial intelligence (AI) space. The company has formed a global partnership with Adesso, a prominent IT service provider, to deliver AI-driven modernization services to businesses worldwide.

Partnership Highlights

Collaboration Focus: AI-driven modernization services
Geographical Scope: Global
Key Players: Sonata Software and Adesso
Target Beneficiaries: Businesses worldwide

Potential Impact

This partnership is poised to bring tangible benefits to businesses across the globe. By combining Sonata Software's expertise in IT services and technology solutions with Adesso's proficiency in IT services, the collaboration aims to:

Enhance business modernization efforts through AI integration
Provide innovative solutions to meet evolving market demands
Improve operational efficiency and decision-making processes for client businesses

Strategic Implications

The formation of this global partnership underscores the growing importance of AI in business modernization. It also highlights Sonata Software's commitment to expanding its service offerings and global reach through strategic collaborations.

As businesses increasingly look to leverage AI for competitive advantage, partnerships like this one between Sonata Software and Adesso are likely to play a crucial role in shaping the future of IT services and business transformation.

While specific details about the implementation and rollout of these AI-driven modernization services are yet to be disclosed, this partnership signals a significant step forward in the integration of AI technologies into business processes on a global scale.