Sonata Software Q2 FY27 Results (NSE: SONATSOFTW)
Signal: Growth reaccelerated
The read
The key inflection is sequential margin recovery: derived consolidated EBITDA margin improved to 7.3% from 5.2% QoQ, but gross margin remains 641bps below last year at 29.5% and PAT is down 3.2% YoY to ₹11,640 lakh; the operating recovery is therefore incomplete and standalone PAT is inflated by subsidiary dividends.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹2,445.2 Cr | +15.4% | -25.4% |
| Net profit | ₹116.4 Cr | -3.2% | |
| EBIT margin | 7.3% |
P&L walk
Consolidated revenue increased 15.4% YoY to ₹244,520 lakh but fell 25.4% QoQ; derived EBITDA margin recovered to 7.3% from 5.2% QoQ but remained 81bps below the year-ago level, while PAT declined 3.2% YoY to ₹11,640 lakh.
Segments
No segment table is included in the provided filing text; the material standalone-versus-consolidated divergence is that standalone PAT of ₹19,019 lakh exceeded consolidated PAT of ₹11,640 lakh because standalone other income included ₹15,046 lakh of subsidiary dividends.
Key positives
- Consolidated revenue grew 15.4% YoY to ₹244,520 lakh despite a 25.4% QoQ decline.
- Derived consolidated EBITDA margin recovered 212bps QoQ to 7.3%, helped by employee benefits expense declining 9.5% YoY to ₹38,250 lakh.
- Standalone operating cash flow turned positive at ₹2,300 lakh in H1FY27 versus negative ₹2,591 lakh in H1FY26.
- The company declared a second interim dividend of ₹1.25 per share.
Key concerns
- Gross margin compressed 641bps YoY to 29.5% as traded-goods purchases rose 27.6% to ₹172,158 lakh, faster than revenue growth of 15.4%; the filing does not disclose the reason.
- PAT declined 3.2% YoY to ₹11,640 lakh despite revenue growth, showing that margin pressure and higher depreciation are still diluting operating gains.
- Standalone PAT of ₹19,019 lakh was supported by ₹15,046 lakh of subsidiary dividends, so standalone earnings overstate underlying operating performance.
- Consolidated revenue fell 25.4% QoQ from ₹327,910 lakh to ₹244,520 lakh, indicating volatile quarterly execution.
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