Whalesbook
International IT Services Show Growth
Sonata's international IT services showed resilience, with full-year FY26 revenue reaching ₹2,948.0 crore, up 4.2% year-on-year. For the fourth quarter, revenue stood at ₹779.2 crore, marking a 5.5% rise sequentially. In U.S. dollar terms, FY26 revenue was $328.4 million, while Q4 FY26 revenue held steady at $82.4 million, flat quarter-on-quarter and up 1.3% year-on-year. In constant currency, Q4 revenue grew by 0.6% sequentially and 1.1% year-on-year, indicating steady underlying demand.
Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) for this segment, before other income, forex, and exceptional items, climbed 9.3% from the previous quarter to ₹157.4 crore in Q4 FY26. For the full fiscal year, EBITDA rose 13.1% year-on-year to ₹543.7 crore. Profit After Tax (PAT) in this division saw a significant 40.6% jump quarter-on-quarter in Q4 FY26, reaching ₹84.2 crore, contributing to an 18.7% annual growth for FY26 PAT.
Domestic Segment Faces Challenges
In contrast, Sonata's domestic products and services segment faced pressures. While FY26 revenue grew 5.9% year-on-year to ₹7,772.1 crore, Q4 FY26 revenue was ₹1,759.2 crore. Gross contribution for the quarter dipped 1.1% sequentially to ₹75.3 crore, and FY26 gross contribution fell 3.5% year-on-year.
EBITDA in this segment decreased 8.8% quarter-on-quarter to ₹51.2 crore in Q4, and PAT declined 3.6% for the full fiscal year. Efficiency in the domestic segment showed mixed results. Days Sales Outstanding (DSO) increased to 47 days in Q4 FY26 from 42 days in Q3. Return on Capital Employed (RoCE) saw a slight uptick to 43.5% from 43.1%, while Return on Net Worth (RoNW) decreased to 39.0% from 41.8% in the prior quarter.
Consolidated Results and Efficiency
Consolidated revenue for FY26 grew 5.4% year-on-year to ₹10,701.2 crore. Consolidated EBITDA increased by 4.2% from the previous quarter to ₹208.7 crore in Q4 FY26, contributing to a 7.5% annual rise. Profitability improved thanks to enhanced operational efficiencies. Consolidated Return on Capital Employed (RoCE) rose significantly to 28.1% in Q4 FY26 from 23.3% in Q3 FY26, while Return on Net Worth (RoNW) climbed to 32.5% from 27.7%.
Dividend for Shareholders
Sonata Software's board recommended a final dividend of ₹4.15 per equity share, a move beneficial to shareholders. This represents a substantial 415% payout on a face value of ₹1 for the financial year ended March 31, 2026. The dividend is subject to shareholder approval at the upcoming annual general meeting, after which it will be dispatched within 30 days.
Stock Market Response
Sonata Software Ltd shares closed at ₹271.65 on Thursday, May 7, gaining ₹2.00 (0.74%) on the BSE. The stock movement reflected investor sentiment, balancing the profit growth and dividend announcement against the revenue dip.