Is Sonata Software overvalued or undervalued?

As of 17 November 2025, Sonata Software's valuation grade has moved from fair to attractive, indicating a positive shift in its market perception. The company is currently deemed undervalued, supported by a PE ratio of 23.52, an EV to EBITDA of 16.19, and a robust ROCE of 25.50%. In comparison, its peer TCS has a PE of 22.32 and EV to EBITDA of 15.69, while Infosys shows a PE of 22.23 and EV to EBITDA of 14.57, highlighting Sonata's competitive positioning within the industry. Despite recent stock performance lagging behind the Sensex, with a year-to-date return of -38.30% compared to the Sensex's 8.72%, the underlying financial metrics suggest that Sonata Software presents a compelling investment opportunity. The company's PEG ratio stands at 0.00, indicating potential for growth that is not currently reflected in its stock price, further reinforcing the assessment of it being undervalued.