Investment Call: Sonata Software Ltd. (20-July-2020)

Sonata Software is a global technology Company that enables successful platform based digital transformation initiatives for enterprises, to create businesses that are connected, open, intelligent and scalable. Sonatas Platformation methodology brings together industry expertise, platform technology excellence, design thinking led innovation and strategic engagement models to deliver sustained long term value to customers.

In music, Sonata represents a principle of composing large-scale works. It is a mélange of scales, rhythms, performers, and instruments — creating a performance that is both inspiring and marvelous. This resonates with our core beliefs and founding principles, one of the many reasons why we chose the name ‘Sonata’.

With this in mind, when we wanted to present some of our success stories, we decided to make a musical statement. This, with long-playing records. LP records are known for flawless listening experience –– just like Sonata’s long history of delivering world-class experience across all stakeholders: clients, Sonatians, partners, and shareholders.

C.M.P-242.90 As On 20-07-2020.

Low Valuation As Per other Industry stocks

TargetPrice-350 (12 Months)

Market Cap:  2,534 Cr.

Book Value:  63.68

Face Value:  1.00

ROCE: 46.50 %

Stock P/E: 9.15

• ROE: 34.02 %
• Sales Growth (3Yrs): 15.13 %
• Dividend Yield: 8.41 %

Pros:

Company is virtually debt free.

Stock is providing a good dividend yield of 8.41%.

Company has a good return on equity (ROE) track record: 3 Years ROE 31.02%

Company has been maintaining a healthy dividend payout of 56.49%

Cons:

Promoter holding is low: 28.51%

Debtor days have increased from 79.67 to 99.99 days.

Advice:-

investors are advised to consult their professional investment adviser/ consultant/ tax advisor for investment advice in this regard.