Sonata Software (SONATSOFTW) Q2 26/27 earnings summary

Executive summary

• Q2 FY27 consolidated revenue was ₹2,445.2 crore, up 15.4% YoY; PAT was ₹116.4 crore, down 3.2% YoY and up 7.7% QoQ.

• International Services grew sequentially and YoY despite a top-account ramp-down; management expects positive momentum and considers the renewal-related decline behind it.

• AI-led work represented 25% of the order book; domestic gross contribution grew 19.3% YoY.

• H1 FY27 revenue rose 12.6% YoY to ₹5,724.3 crore, while PAT declined 2.2% to ₹224.5 crore.

Financial highlights

• Consolidated Q2 revenue was ₹2,445.2 crore, down 25.4% QoQ and up 15.4% YoY; Q2 revenue was $255.9M.

• Consolidated EBITDA before forex and other income was ₹179.5 crore at a 7.3% margin; EBITDA after those items was ₹201.8 crore at an 8.2% margin.

• Consolidated PAT was ₹116.4 crore versus ₹108.1 crore in Q1; EPS was ₹4.2.

• International Services revenue was ₹797.9 crore, up 2.7% QoQ and 9.3% YoY; USD revenue was $82.8M, up 1.0% QoQ and 0.9% YoY.

• Domestic revenue was ₹1,655.6 crore, down 33.9% QoQ and up 19.0% YoY; gross contribution was ₹82 crore, up 4.5% QoQ and 19.3% YoY.

Outlook and guidance

• International Services expects positive growth momentum; isolated Q3 headwinds may arise in BFSI and TMT, while management expects margin momentum to improve from Q2.

• Management cited an 18%-20% International Services margin aspiration and expects positive margin momentum in the coming quarter, without quantifying the increase.

• Domestic business expects a medium-term growth trajectory, with priorities in cloud-managed services and AI-led transformation; no specific growth rate was provided.

• The five-year AWS collaboration is in capability-building; execution is expected to start in Q1 next FY after two to three quarters of setup, with a gradual aim to double AWS-related earnings.