Is Sonata Software overvalued or undervalued?

As of 14 November 2025, Sonata Software's valuation grade has moved from expensive to fair. The company appears to be fairly valued at this time, with a PE ratio of 23.68, an EV to EBITDA of 15.39, and a ROE of 24.89%. In comparison to its peers, TCS has a PE ratio of 22.34 and an EV to EBITDA of 15.7, while Infosys shows a PE of 22.19 and an EV to EBITDA of 14.54, indicating that Sonata is competitively positioned within its industry.
Despite a recent decline in stock performance, with a year-to-date return of -37.90% compared to the Sensex's 8.22%, the company's strong ROCE of 37.20% and a dividend yield of 1.51% suggest solid operational efficiency and shareholder returns. Overall, Sonata Software's current valuation reflects a balanced assessment of its financial metrics and market position.