Sonata Software Reveals Impressive Dividend and Financial Growth

Sonata Software's Remarkable Dividend and Financial Results

Sonata Software (NSE: SONATSOFTW) (BSE: 532221), a leading company in Modernization Engineering, has recently reported impressive financial results for its fiscal year. The company announced a final dividend of 440%, reflecting its healthy earnings and solid business strategy.

Financial Highlights for FY'25

In the latest results, Sonata Software highlighted key achievements including a total revenue of ?10,157.2 crores, registering a year-on-year growth of 17.9%. Although Q4 2025 revenue showed a decline of 7.9% quarter-over-quarter at ?2,617.2 crores, the overall year's performance was strong.

The EBITDA for FY'25 was reported at ?689.3 crores, which is a decrease of 5.2% compared to the previous year, while the quarter saw an increase of 5.8% in EBITDA at ?172.5 crores. Additionally, the PAT after accounting for exceptional items reached ?424.7 crores, marking a 37.6% growth from FY'24.

Insights from Company Leaders

Mr. Samir Dhir, Managing Director and CEO of Sonata Software, remarked on the quarterly results, stating, "In Q4, we delivered a QoQ 1.9% improvement in EBITDA. Over FY'25, we secured 11 large deals, showcasing our diversification strategy's success in sectors like Healthcare and BFSI. We are committed to our long-term growth trajectory as clients increasingly seek modernization for competitive advantages."

Mr. Sujit Mohanty, Managing Director and CEO of Sonata Information Technology Limited, added, "This quarter, we demonstrated resilience by renewing key client contracts, often at enhanced values, despite the challenges in the market. Our focus on cloud transformation has been pivotal in onboarding new customers and registering better gross contribution year-on-year."

Sector Performance and Developments

For the International IT Services segment, revenue for FY'25 stood at ?2,829.7 crores, reflecting a 5.6% growth year-on-year. During Q4, revenue declined by 4.0%, with a total of ?702.3 crores. In USD terms, FY'25 revenue reached approximately $335.5 million, which is a 3.7% increase, while the quarter showed a 6.6% drop to $81.3 million.

In terms of profitability, the EBITDA (before other income and forex) for FY'25 was ?480.5 crores, down 14.7%. However, the quarterly figures saw an 8% increase, achieved through a focus on operational efficiency. The PAT after exceptional items for FY'25 was ?246.6 crores, boosting by 69.9% from the previous fiscal year, with quarterly earnings at ?62.3 crores, reflecting a 9.5% increase.

Domestic Products and Services Contributions

Turning to Domestic Products and Services, FY'25 revenue surged to ?7,340.6 crores, with an impressive 23.4% year-on-year growth. Yet, Q4 revenue noted a decrease of 9.1% to ?1,918.2 crores. Gross contributions for the year reached ?299.1 crores, a growth of 14.8% YoY. Quarterly gross contribution remained steady at ?78.4 crores.

EBITDA for the Domestic segment also showed a promising outlook, with FY'25 figures standing at ?208.6 crores, displaying a 26.8% YoY growth. The Q4 EBITDA reached ?56.5 crores, an increase of 0.1%. PAT for FY'25 hit ?178.1 crores, reflecting a 9.0% increase year-on-year, while Q4 was recorded at ?45.2 crores, a slight drop of 6.0% QoQ.

Strategic Growth and Market Positioning

Sonata Software continues to evolve against the backdrop of a duality in technology adoption, where clients aim for cost efficiency yet strive to modernize digital frameworks. The company leads with a distinct approach known as Platformation.AI, focusing on creating agile digital businesses. This innovation encompasses various domains including Data, Cloud, Automation, and Cyber Security.

The company’s commitment to responsible AI through its Sonata Harmoni.AI initiative reinforces its dedication to ethical practices while promoting innovation. By integrating AI into businesses, Sonata enables clients to enhance their operational efficiencies, improve consumer experiences, and establish innovative models.

Conclusion: Looking Ahead

Headquartered in Bengaluru, Sonata Software boasts a strong international presence across North America, UK, Europe, APAC, and ANZ. Its partnerships with major technology providers like Microsoft and AWS further solidify its market stance, and with continued growth in sectors such as BFSI and Healthcare, Sonata demonstrates great potential.

Frequently Asked Questions

What is the final dividend declared by Sonata Software?

Sonata Software has declared a final dividend of 440% for FY'25.

How did Sonata Software perform financially in FY'25?

The company reported revenues of ?10,157.2 crores with a year-on-year growth of 17.9%.

What are the key focus areas for Sonata Software?

Sonata focuses on modernization engineering, cloud transformation, and responsible AI offerings.

What improvements did Sonata achieve in its operational metrics?

DSO improved to 61 days in Q4'25, down from 64 days in Q3'25.

How does Sonata Software approach technology adoption?

Sonata emphasizes a dual approach, focusing on efficiency while facilitating modernization for clients.

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