Shares of Sonata Software climbed over 5 per cent in Wednesday’s trade after the IT firm said it signed its largest-ever contract with a total contract value (TCV) of $160 million with a US-based consumer retail company. Sonata will be managing end-to-end IT modernisation and transformation for the client for 10 years.
Following the development, the stock rose 5.17 per cent to hit a high of Rs 844. The scrip hit a 52-week high of Rs 855 on March 15. With Wednesday’s gain, the stock is ip 43 per cent year-to-date.
Recently, Sonata Software North America Inc, a wholly owned subsidiary of Sonata Software, completed the acquisition of Quant Systems Inc. and its subsidiaries.
Sonata Software’s largest acquisition involved a cash payout of $65 million and an earn-out of $95 million payable over the next two years.
“We have assumed 25 per cent YoY revenue growth for Quant Systems with a margin of 25 per cent. The IITS and consolidated revenue will increase by 17 per cent/19 per cent and 4 per cent/5 per cent for FY24/25E respectively. The IITS and consolidated
Ebitda margin will expand by 55 basis points/36 bps and 71 bps/75bps for FY24/25E,” HDFC Institutional Equities estimated in a February 27 note.
The intangibles will be amortised over eight years and depreciation will increase by 87 per cent/76 per cent, leading to 6 per cent/8 per cent EBIT and 2 per cent/6 per cent PAT increase for FY24/25E, it said.
Sonata Software, meanwhile, also signed a partnership agreement with Sinequa, the leading enterprise search cloud company. This partnership will help Sonata offer its customers search solution on which knowledge-intensive organisations can support enterprise-wide search and develop customised domain and situational applications.
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