Wednesday, April 28, 2010

Stock Idea: Sonata Software

This small cap IT company posted revenues of Rs.319.10 crore (Rs 368.38 crore) during the quarter ending March 31, 2010, a drop of 13%. But it managed to hold its fort by reducing expense, depreciation, taxation and interest outgo and posted a 9% higher net profit at Rs.18.78 crore.
About 42% of the company’s revenues came from Europe, 49% from the US and the remaining from the rest of the world. The company added 19 new clients during the year.
Its net profit rose 12.8% to Rs.60.20 crore on 3.1% fall in net sales to Rs 236.09 crore in FY10 compared to FY09. The company's equity capital is Rs 10.52 crore. Face value per share is Re. 1, giving an EPS of Rs.5.72.
Like most of the IT companies, this company too had a nightmarish time due to the strong currency. With the Indian rupee expected to remain strong in the current fiscal too, the company has to look at volume growth or more concentration in Indian markets to probably get over its weak forex earnings. Infact the company is looking at increasing the client list in the European market and plans to go beyond its major partner-cum-client TUI AG and expand into new markets. TUI InfoTec is a joint venture between Sonata Software Ltd and TUI AG, where Sonata owns a majority stake. About 60 per cent of the work from TUI AG is outsourced to Sonata at India with remaining 40% coming to TUI InfoTec. The company is now planning to tap non-TUI clients. Its focus for the coming year would be around Outsource Products Development (OPD), building solutions framework, travel & tourism and Enterprise segment.
The company is looking at new acquisitions in Singapore and Malaysia in the range of $25- $50 million.
The stock price is expected to remain range bound but any news of an acquisition could lead to a spurt. Keep a tab on this stock.
Source: Internet ( by S P Tulsian)

No comments:


The information in this publication is provided by is intended for use for Readers & Traders . Every effort is made to provide accurate information, but cannot guarantee the accuracy of the information or of the market analysis. This is a newsletter and is for informational purposes only. It is not a solicitation or offer to buy or sell futures. There is a high risk of loss in trading futures. You should not trade with money that you cannot afford to lose. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this newsletter. The past performance of any trading system or methodology is not necessarily indicative of future results.

free counter