Sonata Software Ltd. (SONATSOFTW) Stock Recommendation | Score, Valuation, Technicals & Financial Trend

Score

Click here to find our call on this stock

Strong Sell

Sell

Hold

Buy

Strong Buy

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Comparison

Company

Score

Quality

Valuation

Financial

Technical

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Sonata Software

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Why is Sonata Software Ltd. ?

Strong Long Term Fundamental Strength with an average Return on Equity (ROE) of 31.24%

Healthy long term growth as Net Sales has grown by an annual rate of 21.87%
Company has a low Debt to Equity ratio (avg) at 0.06 times

Flat results in Sep 25

NET SALES(Q) At Rs 2,119.30 cr has Fallen at -20.0% (vs previous 4Q average)
ROCE(HY) Lowest at 25.85%
DPS(Y) Lowest at Rs 4.40

With ROCE of 25.5, it has a Attractive valuation with a 4.8 Enterprise value to Capital Employed

The stock is trading at a discount compared to its peers' average historical valuations
Over the past year, while the stock has generated a return of -46.42%, its profits have fallen by -2%

High Institutional Holdings at 35.18%

These investors have better capability and resources to analyse fundamentals of companies than most retail investors.

Below par performance in long term as well as near term

Along with generating -46.42% returns in the last 1 year, the stock has also underperformed BSE500 in the last 3 years, 1 year and 3 months

Real-Time Research Report

Verdict Report

How much should you hold?

Overall Portfolio exposure to Sonata Software should be less than 10%
Overall Portfolio exposure to Computers - Software & Consulting should be less than 30%

(If sector exposure > 30%, please use optimiser tool to see which are the best stocks to hold in Computers - Software & Consulting)

When to exit? - We will constantly monitor the company and suggest at the appropriate time to exit from the stock

Is Sonata Software for you?

High Risk, Low Return

Absolute

Risk Adjusted

Volatility

Sonata Software

-45.46%

-1.04

44.74%

Sensex

4.68%

0.37

11.83%

Quality

Management Risk

Growth

Capital Structure

Quality grade scale :

Below Average, Average, Good, Excellent

Quality key factors

Factor

Value

Sales Growth (5y)

21.87%

EBIT Growth (5y)

11.92%

EBIT to Interest (avg)

16.57

Debt to EBITDA (avg)

0.72

Net Debt to Equity (avg)

0.24

Sales to Capital Employed (avg)

4.23

Tax Ratio

26.79%

Dividend Payout Ratio

28.76%

Pledged Shares

Institutional Holding

35.18%

ROCE (avg)

63.47%

ROE (avg)

31.24%

Valuation

Valuation Scorecard

Valuation grade scale :

Very Risky, Risky, Very Expensive, Expensive, Fair, Attractive, Very Attractive

Valuation Key Factors

Factor

Value

P/E Ratio

Industry P/E

Price to Book Value

5.76

EV to EBIT

18.97

EV to EBITDA

15.91

EV to Capital Employed

4.84

EV to Sales

1.01

PEG Ratio

Dividend Yield

1.89%

ROCE (Latest)

25.50%

ROE (Latest)

24.94%

Loading Valuation Snapshot...

Technicals

Technical key factors

Indicator

Weekly

Monthly

MACD

Mildly Bullish

Bearish

RSI

No Signal

Bollinger Bands

Mildly Bearish

Moving Averages

Bearish (Daily)

KST

Mildly Bullish

Bearish

Dow Theory

Mildly Bearish

Mildly Bullish

OBV

Bullish

Technical Indicator Scale: Bearish, Mildly Bearish, Sideways, Mildly Bullish, Bullish Turned

Technical Movement

Analyse All Technical Factors

Financial Trend

Financial Trend Scorecard

Financial Trend scale:

Very Negative, Negative, Flat, Positive, Very Positive, Outstanding

7What is working for the Company

OPERATING CF(Y)

Highest at Rs -21.33 Cr

DEBTORS TURNOVER RATIO(HY)

Highest at 5.93 times

PAT(Q)

Highest at Rs 120.19 cr.

EPS(Q)

Highest at Rs 4.33

-12What is not working for the Company

NET SALES(Q)

At Rs 2,119.30 cr has Fallen at -20.0% (vs previous 4Q average

ROCE(HY)

Lowest at 25.85%

DPS(Y)

Lowest at Rs 4.40

DPR(Y)

Lowest at 57.14%

CASH AND CASH EQUIVALENTS(HY)

Lowest at Rs 243.10 cr

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Here's what is working for Sonata Software

Operating Cash Flow - Annually

Highest at Rs -21.33 Cr

in the last three years

MOJO Watch

The company has generated higher cash revenues from business operations

Operating Cash Flows (Rs Cr)

Profit After Tax (PAT) - Quarterly

Highest at Rs 120.19 cr.

in the last five quarters

MOJO Watch

Near term PAT trend is positive

PAT (Rs Cr)

Earnings per Share (EPS) - Quarterly

Highest at Rs 4.33

in the last five quarters

MOJO Watch

Increasing profitability; company has created higher earnings for shareholders

EPS (Rs)

Debtors Turnover Ratio- Half Yearly

Highest at 5.93 times

in the last five half yearly periods

MOJO Watch

Company has been able to settle its Debtors faster

Debtors Turnover Ratio

Here's what is not working for Sonata Software

Net Sales - Quarterly

At Rs 2,119.30 cr has Fallen at -20.0% (vs previous 4Q average)

over average Net Sales of the previous four quarters of Rs 2,648.75 Cr

MOJO Watch

Near term sales trend is very negative

Net Sales (Rs Cr)

Net Sales - Quarterly

Lowest at Rs 2,119.30 cr

in the last five quarters

MOJO Watch

Near term sales trend is negative

Net Sales (Rs Cr)

Cash and Cash Equivalents - Half Yearly

Lowest at Rs 243.10 cr

in the last six half yearly periods

MOJO Watch

Short Term liquidity is deteriorating

Cash and Cash Equivalents

Dividend per Share (DPS) - Annually

Lowest at Rs 4.40

in the last five years

MOJO Watch

Company is distributing lower dividend than previous years

DPS (Rs)

Dividend Payout Ratio (DPR) - Annually

Lowest at 57.14%

in the last five years

MOJO Watch

Company is distributing lower proportion of profits generated as dividend

DPR (%)

Non Operating Income - Quarterly

Highest at Rs 31.36 cr

in the last five quarters

MOJO Watch

Increased income from non business activities may not be sustainable

Non Operating Income