Sonata Software (SONATSOFTW) Q4 05/06 earnings summary

Executive summary

• FY06 consolidated total income Rs 5,108.99m vs Rs 3,337.31m; sales and services Rs 5,070.31m vs Rs 3,293.07m.

• Consolidated PAT before exceptional items Rs 275.41m vs Rs 160.87m; after exceptional items Rs 113.56m vs Rs 160.87m.

• Standalone FY06 total income Rs 1,520.80m vs Rs 1,013.25m; PAT before exceptional items Rs 261.60m vs Rs 164.01m.

Financial highlights

• Consolidated profit before tax Rs 326.52m vs Rs 192.41m; basic EPS Rs 2.62 vs Rs 1.53, and adjusted for exceptional items Rs 2.62 vs Rs 1.53.

• Standalone services revenue Rs 1,486.74m vs Rs 970.10m; PAT margin before exceptional items 17.20% vs 16.19%.

• Consolidated cash from operations after exceptional items Rs 604.13m vs Rs 259.65m; closing cash and bank balances Rs 571.10m vs Rs 166.92m.

Outlook and guidance

• Focus for FY07: extend relationships with 22 new customers added in FY06, including five in Q4, and develop reference customers to convert prospects through differentiated solutions and partnerships.

• Hyderabad development campus planned on eight acres allotted at Poppalguda; the dedicated facility is intended to support global clients and regional growth.

• Research priorities include Microsoft, IBM and Oracle technologies, high-transaction web applications, security and Service Oriented Architecture.