This article first appeared on GuruFocus .
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AI-led Order Book (Q4 '26):$16.9 million.
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AI-led Order Book (FY26):$49 million, contributing 18% of overall order book.
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AI-led Pipeline (Q4 '26):$280 million.
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New Customers (Q4 '26):7 new customers added.
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New Customers (FY26):23 new customers added.
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Top 10 Clients Revenue Share (Q4 '26):54%.
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Order Book (Q4 '26):$95 million with a book-to-bill ratio of 1.166.
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International Services Revenue (Q4 '26):$82.4 million, flat quarter-on-quarter.
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International Services Revenue (FY26):$328.4 million, a degrowth of 2.1% year-on-year.
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Rupee Revenue (Q4 '26):INR779.2 crores, growth of 5.5% quarter-on-quarter.
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EBITDA (Q4 '26):20.2%, up 70 basis points quarter-on-quarter.
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EBITDA (FY26):18.4%, up 1.4% from FY25.
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PAT (Q4 '26):INR84.2 crores, growth of 40.6% quarter-on-quarter.
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PAT (FY26):INR292.7 crores, growth of 18.7% year-on-year.
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Domestic Business Revenue (Q4 '26):INR1,759.2 crores, degrowth of 25% quarter-on-quarter.
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Domestic Business Revenue (FY26):INR7,772.1 crores, growth of 5.9% year-on-year.
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Consolidated Revenue (Q4 '26):INR2,536.2 crores, degrowth of 17.7% quarter-on-quarter.
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Consolidated Revenue (FY26):INR10,701.2 crores, growth of 5.4% year-on-year.
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Consolidated PAT (Q4 '26):INR130.5 crores, growth of 25% quarter-on-quarter.
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Consolidated PAT (FY26):INR464.4 crores, growth of 9.3% year-on-year.
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EPS (FY26):INR16.74 per share, up from INR15.3 per share in FY25.
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Final Dividend:INR4.15 per share.
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Cash Balance (FY26):INR606 crores.
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Warning! GuruFocus has detected 4 Warning Signs with BOM:532221.
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Release Date: May 11, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Sonata Software Ltd ( BOM:532221 ) reported a significant AI-led order book of $16.9 million in Q4 '26, contributing to 18% of the overall order book.
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The company secured two large deals in Q4 FY26, with a total of eight large deals for the fiscal year, indicating strong deal momentum.
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EBITDA before other income and ForEx improved to 20.2% in Q4 '26, up 70 basis points quarter-on-quarter, driven by operational improvements.
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The company added seven new customers in Q4 '26, totaling 23 new customers for FY26, showcasing successful client acquisition efforts.
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Sonata Software Ltd ( BOM:532221 ) maintained a strong cash position with a closing cash balance of INR606 crores, reflecting robust cash generation.
Negative Points
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International services dollar revenue experienced a year-on-year decline of 2.1%, indicating challenges in maintaining growth.
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The domestic business faced a revenue degrowth of 25% quarter-on-quarter in Q4 '26, impacted by direct billing from a large client.
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The company's utilization rate reached a high of 91.8%, suggesting limited room for further efficiency gains without additional investments.
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BFSI vertical faced significant challenges, with a notable decline in FY26, highlighting sector-specific pressures.
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The large deal pipeline showed a sharp drop-off, raising concerns about future deal flow and growth prospects.
Q & A Highlights
Q: Can you elaborate on the strategic focus areas for the IITS business, including verticals and sub-verticals, and how M&A fits into the growth strategy? A: Rajsekhar Roy, Chief Technology Officer, explained that the company will maintain its current verticals but will sharpen focus on areas with strong demand. Investments will be made in building offerings and capabilities, forming new partnerships, and enhancing AI delivery. M&A may be considered for new technology opportunities, but there are no immediate plans.
Q: How does Sonata plan to address the challenges in the BFSI vertical and what are the growth prospects? A: Rajsekhar Roy noted that past client-specific issues are largely resolved, but BFSI remains under pressure. Growth will be driven by new wins in the payments space and modernizing core systems for a unified client experience. The focus will be on both existing and new clients.
Q: What is the outlook for the domestic business, especially in light of direct competition from OEM partners? A: Sujit Mohanty, CEO of Domestic Business, stated that the company does not expect further significant losses to direct billing. The focus will be on expanding market coverage, partnerships, and strategic customer relationships. The business is expected to return to growth within the fiscal year.
Q: Can you provide insights into the large deal pipeline and the apparent drop in numbers? A: Shilpa Kolhatkar, Deputy CFO, clarified that the pipeline remains strong despite a temporary drop due to the conversion of two large deals. The overall momentum and count of large deals continue to be robust.
Q: What are the expectations for margins in the international business, and will there be increased investments for growth? A: Jagannathan N., CFO, mentioned that margins are expected to remain stable, supported by operational improvements and AI adoption. While utilization is at optimal levels, the company is open to investments if required for future growth.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
