Sonata Software's Q2 Dilemma: Profit Climbs, Revenue Tumbles! Stock Plummets 5% - What's Next?

Author

Aditi Singh | Whalesbook News Team

Detailed Coverage:

Sonata Software's stock experienced a decline of up to 5%, settling at ₹371.15, after the company released its September quarter financial results. Despite a 10% quarter-on-quarter rise in net profit to ₹120 crore, the company's revenue fell sharply by 28.5% to ₹2,119.3 crore compared to the previous quarter. Earnings Before Interest and Taxes (EBIT) saw a modest increase of 9.2% to ₹146.3 crore, with the EBIT margin improving to 6.9% from 4.5% in the prior quarter.

Further, Sonata Software announced a second interim dividend of ₹1.25 per equity share for the financial year 2025-26, with a record date of November 21, 2025. The dividend is scheduled to be paid by December 3.

Samir Dhir, MD & CEO of Sonata Software, noted steady progress in International IT Services and highlighted the acquisition of a large deal in the healthcare vertical. He also emphasized that AI-led orders constituted approximately 10% of the quarter's order book, reflecting strategic investments.

Sujit Mohanty, MD & CEO of Sonata Information Technology, expressed confidence in disciplined execution and focused investments, positioning the company for sustained growth despite industry headwinds.

**Impact** This news could impact investor sentiment towards IT service companies, especially concerning revenue growth trends. The significant year-to-date decline suggests underlying concerns that the mixed results may not fully alleviate, potentially leading to further volatility for Sonata Software's stock. Rating: 6/10.

**Difficult Terms** * **Net Profit**: The profit a company makes after deducting all expenses and taxes from its revenue. * **Revenue**: The total amount of income generated by the sale of goods or services related to the company's primary operations. * **QoQ (Quarter-on-Quarter)**: A comparison of financial data from one fiscal quarter to the immediately preceding fiscal quarter. * **EBIT (Earnings Before Interest and Taxes)**: A measure of a company's operating performance, indicating profit before the costs of financing and taxes are considered. * **EBIT Margin**: A profitability ratio that shows how much profit is generated from each unit of sales after accounting for variable production costs. It is calculated as EBIT divided by Revenue. * **Interim Dividend**: A dividend payment made by a company during its fiscal year, rather than at the end of the year. * **Record Date**: A specified date by which an investor must be registered as a shareholder to be eligible to receive a declared dividend.