Shares of Sonata Software Ltd. gained as much as 9% on Friday, marking the biggest single-day gain in a month. According to reports from CNBC TV18, the stock was trading 8% higher at ₹292.6 following the company's fourth quarter results announcement. The company delivered exceptional operational performance with Consolidated PAT growing by 25% quarter-on-quarter and 9.3% year-on-year to reach ₹130.5 crore for Q4 FY26. Despite a 17% drop in topline revenue, the company demonstrated strong profitability improvements with margins expanding by 160 basis points sequentially.
The company successfully secured two significant large deals during the quarter, including an AI-led platform modernization project for a major global fintech firm and a modern engineering engagement with a leading PE-backed software holding company. As reported by CNBC TV18, 37% of its large deal pipeline comprises Fortune 500 clients, while the company's AI-led pipeline has surged to $280 million with approximately $16.9 million in AI-specific wins already recorded. The company is reinforcing its identity as an "AI-First Modernization Engineering Company" with continued conversion of the AI pipeline into revenue streams.
According to the company's investor presentation, Sonata Software's Cloud and Data services business now accounts for 65% of total revenue in FY26, up from 52% in FY24. As reported by CNBC TV18, the Cloud and Data pipeline currently represents 57% of the active pipeline, reflecting the company's strategic focus on high-growth cloud services. The company has been strategically pushing to become an "AI-first, cloud-first, platform-led" company, with this theme consistently highlighted throughout FY24 and early FY25.
The board has approved a dividend payout of ₹4.15 per equity share for shareholders, signaling strong financial health. According to CNBC TV18, the stock has risen 19% in the last one month, though it remains significantly below its 52-week high of ₹452.8. The topline decline was primarily attributed to underperformance in the company's domestic business segment, while the company continues to focus on expanding its partnership ecosystem, notably with Microsoft, to enhance capabilities in cloud services and AI solutions.
