Sonata Software (SONATSOFTW) Q4 00/01 earnings summary

Executive summary

• FY01 total income was Rs1,289.19m and PAT Rs333.35m; prior-year comparison is not like-for-like after the Indian business transfer effective 1 Jul 2000.

• International operations delivered 38.41% revenue growth and 47.80% PAT growth YoY; 30 new customers were added.

• US market slowdown, dot-com failures and vendor consolidation made customer decisions slower and more conservative.

Financial highlights

• FY01 total income Rs1,289.19m vs Rs1,761.74m; total expenditure Rs946.77m vs Rs1,509.61m, with comparability affected by the business transfer.

• FY01 EBIDT Rs378.40m, PBT Rs342.42m and PAT Rs333.35m, compared with Rs288.99m, Rs252.13m and Rs233.96m, respectively, in FY00.

• Tax-free dividend of Rs0.50/share proposed for FY01, including Rs0.20 interim and Rs0.30 final, versus Rs0.40/share in FY00.

Outlook and guidance

• Current-year outlook was constrained by the US slowdown after eight years of growth, the dot-com bust and growing vendor consolidation.

• Priorities included US healthcare expansion, greater European marketing investment, and stronger eCRM, EAI and m-commerce capabilities.

• Indian operations planned to add product lines, improve marketing and pursue higher-margin business; IT consulting focused on domain solutions and larger contracts.