Sonata margin widens as quarterly revenue drops 25.43%
Expenses fell 27.11%, but a higher tax rate and other income shaped the 7.67% sequential rise in consolidated net profit.
Filed 05 Nov 2026, 20:42 IST · after market close · Sonata Software Ltd (SONATSOFTW)
Key takeaways
- Consolidated operating margin widened 2.13 percentage points QoQ even as revenue fell -25.43%, because expenses fell -27.11%.
- Net profit rose +7.67% QoQ, but a 4.87-percentage-point tax-rate increase and other income at 14.19% of PBT qualify the improvement.
- At 7.34%, Sonata's operating margin was 9.01 percentage points below the 16.35% IT peer median across 69 reported companies.
Price around the results
Margin improved despite a sharp revenue contraction
Consolidated revenue contracted -25.43% QoQ, yet operating profit increased +5.11% because expenses fell -27.11%, faster than revenue. That combination lifted operating margin by 2.13 percentage points to 7.34%, despite the smaller revenue base.
Tax and other income reduced the quality of the profit increase
Profit before tax grew +14.76% QoQ, while interest rose +15.82% and depreciation increased +7.60%. Net profit rose only +7.67% as tax increased +41.20% and the tax rate widened 4.87 percentage points to 26.01%. Other income accounted for 14.19% of PBT, meaning a material part of pre-tax profit came from outside operations.
Operating margin remains well below the IT peer median
Sequentially, operating margin improved from 5.21% in Q1FY27 to 7.34% in Q2FY27. However, it remained 9.01 percentage points below the 16.35% median for 69 IT companies that had reported, placing Sonata 11th from the bottom.
Results were filed after market close
Sonata filed these consolidated results after market close on 5 November 2026. A post-results market move is not included in this read.
Q2FY27 at a glance
Consolidated figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q2FY27 | Q1FY27 | QoQ |
|---|---|---|---|
| Revenue | ₹2,445 cr | ₹3,279 cr | -25.43% |
| Other income | ₹22 cr | ₹7 cr | +229.84% |
| Expenses | ₹2,266 cr | ₹3,108 cr | -27.11% |
| Operating profit | ₹179 cr | ₹171 cr | +5.11% |
| Operating margin (%) | 7.34% | 5.21% | — |
| Interest | ₹14 cr | ₹12 cr | +15.82% |
| Depreciation | ₹31 cr | ₹28 cr | +7.60% |
| Profit before tax | ₹157 cr | ₹137 cr | +14.76% |
| Tax | ₹41 cr | ₹29 cr | +41.20% |
| Net profit | ₹116 cr | ₹108 cr | +7.67% |
| EPS (₹) | ₹4.21 | ₹3.91 | +7.67% |
Operating margin of 7.34% compares with a Information Technology sector median of 16.35% across 69 peers that have reported Q2FY27.
What to watch
- Whether operating margin holds above 7.34% after the 2.13-percentage-point QoQ improvement.
- Whether revenue reverses the -25.43% QoQ movement.
- Whether other income's share of PBT changes from 14.19% alongside the 26.01% tax rate.