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You are here : IndiaNotes >> Research & Analysis >> Companies >> Sonata Software Ltd. >> Research

Sonata Software Q3FY18: An investment idea for medium to long-term

Firstcall India Equity | 12 Feb, 2018  | Follow Author | Add to my Favourites 
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- Sonata Software Ltd is a global IT solutions firm focused on catalyzing business transformation initiatives of its clients through deep domain knowledge, technology expertise and customer commitment.

- In Q3 FY18, the company achieved a consolidated turnover of Rs. 7667.46 mn which is up by 33.32% as against Rs. 5750.98 mn in the corresponding quarter of the previous year.

- During Q3 FY18, consolidated Operating profit (EBITDA) stood at Rs. 715.66 mn as against Rs. 649.85 mn in Q3 FY17, grew by 20.19%. Consolidated Profit before tax at Rs. 675.19 mn in Q3 FY18 compared to Rs. 598.51 mn in Q3 FY17, up by l2.8l%.

- In Q3 FY18, consolidated net profit increased by 22.00% to Rs. 493.16 mn from Rs. 404.22 mn in Q3 F Y17.

- The company has reported an EPS of Rs. 4.69 for the 3rd quarter as against an EPS of Rs. 3.90 in the corresponding quarter of the previous year.

- During the quarter, EBIDTA and PAT margins stood at 9.33% and 6.43% respectively.

- The company’s Net sales stood Rs. 18281.38 mn for the nine months ended Dec 31, 2017 as compared to Rs. 16850.13 mn for nine months ended Dec 31, 2016.

- For nine months ended Dec 31, 2017, Net Profit increased by 13.08% to Rs. 1378.47 mn from Rs. 1219.05 mn for nine months ended Dec 31, 2016.

- Net Sales and PAT of the company are expected to grow at a CAGR of 14% and 12% over 2016 to 2019E, respectively.

Outlook and Valuation


At the current market price of Rs.285.50, the stock P/E ratio is at 15.46 X F Y18E and 13.93 X FY19E respectively.

Earning per share (EPS) of the company for the earnings for F Y18E and FY19E is seen at Rs. 18.47 and Rs. 20.50 respectively.

Net Sales and PAT of the company are expected to grow at a CAGR of 14% and 12% over 2016 to 2019E respectively

On the basis of EV/EBITDA, the stock trades at 9.36 X for F Y18E and 8.19 X for F Y19E.

Price to Book Value of the stock is expected to be at 4.43 X and 3.47 X for F Y18E and F Y19E respectively.

Hence, we say that, we are Overweight in this particular scrip for Medium to Long term investment.

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About Firstcall India Equity

Firstcall India Equity of Firstcall India Equity Advisors Pvt. Limited (FIEA), is a leading financial services provider in India and a SEBI Registered Category-I Merchant Banker. FIEA is a culmination of a credible Equity Research Capabilities, Long Standing Relationship with leading FIIs, DFIs, MFs, Overseas Pension Funds etc. The company’s research caters to the needs of the largest news wire and media houses of the world namely Reuters, Thomson, Capital IQ,, Emerging Markets Euro money Publications-UK. The Company is among the major players in the Debt and Equity markets.

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Disclaimer: The author has taken due care and caution to compile and analyse the data. The opinions expressed above are only the views of the author, and not a recommendation to buy or sell. Neither the author nor accept any liability whatsoever arising from the use of any of the above contents.

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