Sonata Software Ltd (532221) closes at ₹752.60 with a Fall of -0.40% on 02-July-2021 with formation of a Small Red Candle on Daily Price Chart.
About the Company : Sonata Software Limited is an information technology (IT) services and solutions company. The Company's primary segments are based on geographical areas, and include Domestic (India) and International (Rest of the world). Its secondary segment comprises business segments, products and services. It provides solutions for travel, retail and distribution, and software product companies by integrating technologies, such as Omni-channel commerce, mobility, analytics, cloud and enterprise resource planning. Its operations include software development, technical services and product marketing. It is involved in the provision of IT services and solutions to its customers, and distribution of software products in India. Its services include application lifecycle services, which deliver application management with facilities, such as application development and application migration; retail IT services, such as Dynamics AX retail, and technology infrastructure services
Sector Update : Low Code Solutions Provider & SaaS are
expected to Grow at +20% by 2024.
Financials : Sonata Software
Ltd has posted Net Sales / Revenue of ₹4158.30 Cr & Net
Profit of ₹230.10 Cr in FY2021 and expected to post Net Sales /
Revenue of ₹5050.80 Cr & Net Profit of ₹337.90 Cr in FY2022 & Net Sales / Revenue of ₹5549.20 Cr & Net
Profit of ₹385.60 Cr in FY2023 .
EPS will be improved from 25.58
in FY2021 to 39.58 in FY2023 & Return of Equity (RoE) from 25.8% to 39.20
during the same period..
Valuations :
The Company is now Trading at X 2..10 of its valuations of its FY2021 earnings with ~110% Premium
and X1.42 of its FY2022 earnings with ~42% Premium & X1.25 of its FY2023
earnings with ~25% premium .
Margin
of Safety (1Yr Bond Yield: Value>1 ) is now
0.70 which makes is attractive after ~30% dip in price.
The Equity Value Per Share ( Enterprise Value Method ) is ₹689.00
If We factor its FY2023 earnings/valuations, its Price
arrives at ₹1270.
Market Sentiment Update : Our Nifty Next Indictor (NNI) is
now at 117.94 as on 02-July-2021, which suggests the Return on Equity
Investment will be 2.30% in next 6Month; 7.7% in 12M & 0.30% in 24M( Based on Historical data).
Disclaimer : We are / may going to take exposure shortly.
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