Sonata Software Q1 FY27 Results (NSE: SONATSOFTW)
Signal: Growth reaccelerated
The read
The quarter shows a revenue recovery to ₹327,910 lakh, up 10.6% YoY after Q4FY26's decline, but the trajectory remains margin-constrained: EBITDA margin fell 63bps YoY to 5.4%, EBITDA was down 0.7% YoY and PAT declined 1.1% to ₹10,811 lakh. The parent was materially stronger, with standalone revenue up 59.3% YoY and EBITDA margin at 15.2%, so the key investor question is whether consolidated subsidiary execution can convert growth into a sustained margin recovery.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹3,279.1 Cr | +10.6% | +29.3% |
| EBIT | ₹149.1 Cr | -2.4% | |
| Net profit | ₹108.11 Cr | -1.1% | |
| EPS | ₹3.91 | -0.8% | |
| EBIT margin | 5.4% |
P&L walk
Revenue accelerated to ₹327,910 lakh, up 10.6% YoY and 29.3% QoQ, but EBITDA was broadly flat at ₹17,753 lakh and margin contracted to 5.4% from 6.0% YoY, resulting in PAT of ₹10,811 lakh, down 1.1% YoY.
Segments
No segment results table is included in the provided filing text; the material divergence is instead between standalone revenue growth of 59.3% YoY and consolidated revenue growth of 10.6% YoY, indicating subsidiaries materially diluted the parent's growth profile.
Key positives
- Consolidated revenue increased 10.6% YoY to ₹327,910 lakh and 29.3% QoQ, reversing the 3.1% YoY decline reported in Q4FY26.
- Employee costs declined 16.0% YoY to ₹35,137 lakh while revenue rose 10.6%, reducing employee-cost intensity by 340bps to 10.7%.
- Standalone EBITDA margin expanded 650bps YoY to 15.2%, with standalone revenue up 59.3% YoY to ₹44,385 lakh.
- Finance costs declined 28.6% YoY to ₹1,201 lakh at the consolidated level.
- The company declared an interim dividend of ₹1.25 per share.
Key concerns
- Consolidated EBITDA fell 0.7% YoY to ₹17,753 lakh despite 10.6% revenue growth, and EBITDA margin contracted 63bps YoY to 5.4%.
- Consolidated PAT declined 1.1% YoY to ₹10,811 lakh, while the prior-quarter comparison showed a 17.1% decline.
- Standalone revenue growth of 59.3% YoY did not translate into comparable consolidated growth of 10.6%, pointing to a significant subsidiary drag or consolidation mix effect.
- Depreciation increased 9.0% YoY to ₹2,843 lakh, exceeding EBITDA growth of negative 0.7% YoY.
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