Shares of Sonata Software Ltd have delivered multibagger returns in the long term. The IT sector stock has gained 43% from its 52-week low this year. The multibagger IT stock rose 115% in three years and gained 500% in five years. The stock ended 0.12% lower at Rs 669.10 on Tuesday. The multibagger stock saw very low volatility with a beta of 0.8 in the last one year.
In terms of technicals, the relative strength index (RSI) of the Sonata Software stock stands at 67.6, signaling it's trading neither in the oversold nor in the overbought zone. Sonata Software shares are trading higher than the 5 day, 10 day, 20 day, 30 day, 50 day, 100 day, 150 day and 200 day moving averages.
Market cap of the firm slipped to Rs 18,763 crore.
Total 0.33 lakh shares of the firm changed hands amounting to a turnover of Rs 2.21 crore on Tuesday
Emkay Global has initiated coverage on Sonata Software with a buy call. It has assigned a price target of Rs 780 to the IT stock.
"We initiate coverage with BUY; growth rebound to drive stock re-rating. After growth deceleration in the last 3 quarters, revenue growth is expected to rebound in H2 with margin recovery. We expect revenue/adjusted profit CAGR of 14%/17%, respectively, over FY24-27E. We initiate coverage on Sonata Software with BUY and TP of Rs780, at 30x Dec-26E earnings," said the brokerage.
The brokerage cited concentration risk, delay in deal closures amid macro and geopolitical uncertainties and potential transformative impact of AI as key risks to its projection.
Brokerage HDFC Securities has initiated coverage on Sonata Software with a buy call. It has a price target of Rs 700 on the stock.
The brokerage said," Anticipated uptick in demand, particularly discretionary spending in CY25, should augur well for SSOF's growth acceleration; we remain positive on its medium-term growth prospects. The management shared its aspiration of achieving revenue run-rate of $1.5 billion ($1 billion from SITL; $0.5 billion for the International IT Services business, implying 4% CQGR) by FY27E, with International IT Services business EBITDAM in the low 20s. SSOF trades at ~45%/30% discount to PSYS/Coforge which the brokerage believes will narrow with rebound in growth momentum."
Sonata Software specialises in cloud and data modernisation, microsoft dynamics modernisation, digital contact center setup and management, managed cloud services and digital transformation services.