Sonata Software's 5.21% margin ranks third from bottom among 31 IT peers
The consolidated quarter was filed after market close; management highlighted one US retailer AI-led legacy-modernisation deal.
Filed 06 Aug 2026, 21:39 IST · after market close · Sonata Software Ltd (SONATSOFTW)
Key takeaways
- Consolidated Q1FY27 operating margin was 5.21%, placing Sonata Software 12.94 percentage points below the IT peer median.
- Other income of Rs 6.77 cr was not a major contributor to profit before tax of Rs 137.09 cr, leaving operating performance as the main earnings driver.
- Management said the company won one Q1 US retailer deal for AI-led legacy modernisation and targets net-zero emissions by 2050.
Price around the results
Q1FY27 earnings were primarily operating-led
Sonata Software reported consolidated operating profit of Rs 170.76 cr on revenue of Rs 3,279.1 cr. Other income of Rs 6.77 cr was small relative to profit before tax of Rs 137.09 cr, so it did not materially lift the quarter's earnings. Interest of Rs 12.01 cr and depreciation of Rs 28.43 cr reduced operating profit before tax.
Operating margin trails the IT peer set
The 5.21% operating margin was 12.94 percentage points below the 18.15% median for 31 IT companies that had reported the same quarter. Sonata Software ranked third from the bottom on this measure. With no sequential or year-on-year comparison provided, the quarter's margin level is more informative than its direction.
Management flags a US retailer deal and net-zero target
Management said the company won one key Q1 deal from a US retailer involving AI-led legacy modernisation. The presentation also said the company targets net-zero emissions by 2050. These disclosures add order context to a quarter for which no revenue-growth or margin driver comparison was provided.
Results were filed after market close
The consolidated results were filed after market close on 06 Aug 2026. The stock's market response is therefore not covered in this note.
Q1FY27 at a glance
Consolidated figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q1FY27 |
|---|---|
| Revenue | ₹3,279 cr |
| Other income | ₹7 cr |
| Expenses | ₹3,108 cr |
| Operating profit | ₹171 cr |
| Operating margin (%) | 5.21% |
| Interest | ₹12 cr |
| Depreciation | ₹28 cr |
| Profit before tax | ₹137 cr |
| Tax | ₹29 cr |
| Net profit | ₹108 cr |
| EPS (₹) | ₹3.91 |
Operating margin of 5.21% compares with a Information Technology sector median of 18.15% across 31 peers that have reported Q1FY27.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
Guidance & outlook
- The company targets achieving net-zero emissions by 2050.
New orders
- The company won one key deal in Q1 involving AI-led legacy modernization for a US retailer.
What to watch
- Whether operating margin moves up from 5.21% and narrows the gap with the 18.15% IT peer median.
- Whether the one US retailer AI-led legacy-modernisation deal produces further disclosed orders.
- Whether other income remains a small contributor relative to profit before tax of Rs 137.09 cr.