Sonata Software Ltd (BOM:532221) Q4 2025 Earnings Call Highlights: Navigating Growth Amidst ...

In This Article:

  • International Services Revenue: $335.5 million, 3.7% growth in reported currency, 3.9% in constant currency for FY25.

  • Rupee Revenue: INR 20,082.97 crore, 5.6% growth for FY25.

  • EBITDA Margin: 17% for FY25, down from 21% in FY24.

  • EBITDA Growth: 1.9% sequential growth to 16.5% in Q4 FY25.

  • Domestic Business Revenue: INR 7,340.6 crore, 23.4% year-on-year growth for FY25.

  • Gross Contribution: INR 299.1 crore for FY25, 14.8% year-on-year growth.

  • Consolidated Revenue: INR 10,157.2 crore, 17.9% year-on-year growth for FY25.

  • Consolidated EPS: INR 15.3 per share for FY25, up from INR 11.12 per share in FY24.

  • Cash Flow to EBITDA: 93.3% for FY25.

  • Closing Cash Balance: INR 707 crore for FY25.

  • Headcount: 6,810 at the end of Q4 FY25, down from 7,090 in Q3 FY25.

  • Attrition Rate: 14% in Q4 FY25, unchanged from Q3 FY25.

  • Utilization Rate: 87% in Q4 FY25, flat quarter-on-quarter.

  • New Customers: 14 added in Q4 FY25.

  • Top 10 Clients Revenue Contribution: 61% in Q4 FY25, down from 66% in Q3 FY25.

Release Date: May 07, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Sonata Software Ltd (BOM:532221) won 11 large deals in FY25, including two marquee wins, which underscores their growing relevance and transformation impact.

  • The company has expanded its presence in BFSI and Healthcare Life Sciences, with these verticals now contributing to 35% of total international business revenue, up from 13% twelve quarters ago.

  • Sonata Software Ltd (BOM:532221) achieved AWS generative AI competency and became a member of the Microsoft Partner AI Council, reinforcing its leadership in enterprise-grade AI adoption.

  • The company reported a strong annuity-driven growth in SITL with an industry-leading ROCE of 43.2% in Q4 FY25.

  • Sonata Software Ltd (BOM:532221) maintained a steady utilization rate of 87% and a low attrition rate of 14%, indicating efficient workforce management.

Negative Points

  • The company faced headwinds in the retail and manufacturing verticals due to budget cuts and broader macroeconomic uncertainty, impacting growth.

  • Sonata Software Ltd (BOM:532221) experienced a significant revenue decline from its largest client due to budget cuts, which was more than anticipated.

  • The EBITDA margin for FY25 stood at 17%, down from 21% in FY24, indicating a decrease in profitability.

  • There is uncertainty in the retail and manufacturing sectors, with longer deal closure cycles and continued softness expected.

  • The company faced challenges in posting results on time, leading to investor dissatisfaction during the earnings call.