Sonata Software shares rally 10% as Q4 net profit rises 21% despite revenue contraction; firm announces dividend

Synopsis

Sonata Software shares surged nearly 10% after the company reported a 21% rise in Q4 FY26 net profit, despite a decline in revenue. Strong EBITDA growth and deal wins supported sentiment, while the firm announced a final dividend. Segment performance remained steady, with gains in both international and domestic businesses.

The shares of Sonata Software rallied nearly 10% on Friday after the company reported a 21% surge in net profit to Rs 130.5 crore in the fourth quarter of FY26, from Rs 107.53 crore in the year-ago period, even as revenue contracted.

The company announced its earnings in the post-market hours on Thursday. While net profit rose, revenue from operations declined more than 3% to Rs 2,536.19 crore in the January-March quarter of FY26, from Rs 2,617.20 crore in the corresponding quarter of FY25. Consolidated EBITDA, meanwhile, rose nearly 21% year-on-year (YoY) to Rs 208.7 crore during the quarter under review.

The company’s international IT services segment recorded a 35% YoY surge in net profit to Rs 84.2 crore, while the domestic products and services segment recorded a 2.5% rise in profit to Rs 46.3 crore during the fourth quarter of the financial year ended March 31, 2026.

Overall, in FY26, Sonata Software saw its net profit rise more than 9% to Rs 464.4 crore, while revenue rose over 5% to Rs 10,701.2 crore from the previous year. EBITDA, meanwhile, increased 7.5% to Rs 741.3 crore during the financial year.

Sonata Software dividend

Along with the Q4 earnings, Sonata Software said that its board of directors, at its meeting, recommended a final dividend of Rs 4.15 per share (415%) with a face value of Re 1 each for FY26, subject to shareholders’ approval at the upcoming Annual General Meeting (AGM). The record date to determine the eligibility of shareholders set to receive the payment is yet to be announced.

“We won two large deals in Q4 FY26 and remain confident on Sonata’s growth momentum by becoming strategic partners to our clients to enable the AI modernisation journey. We will continue to invest in AI capabilities and partnerships to further accelerate our pivot to AI,” said Rajsekhar Datta Roy.

Sujit Mohanty, MD and CEO of Sonata Information Technology Limited, said, “This quarter, we achieved strong performance in our core cloud platform offerings. We successfully acquired new clients for our cloud services and data protection solutions business areas. We realised YoY growth from key accounts.”

Sonata Software share price

Sonata Software shares rallied nearly 10% to trade at Rs 297.50 apiece on Friday morning. The stock has gained 14% in one week and more than 18% in one month. Overall, the shares of the company are, however, down around 20% so far in 2026 and 26% in one year.

In the longer term, Sonata Software shares have dropped 33% in three years but gained 30% in five years. The company currently has a market capitalisation of nearly Rs 8,150 crore.

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