Result Update

Institutional Research
India I IT Services
31 May 2019

Sonata Software Buy

Target Price: Rs415

Steady quarter, strong payout ratio maintained Price: Rs356

Forecast return: 17%

Sonata Software delivered a steady performance for Q4FY19 with in-line IT services Market Data
revenues and margins. PAT was 8% ahead of our estimates aided by higher other Bloomberg: SSOF IN
income. Sonata's IT services USD revenues grew by 12% for FY19 (11% organic 52 week H/L: Rs429/265
growth). We build 18% USD revenue growth for FY20 (Organic growth is 12% and rest Market cap: Rs37bn
is owing to full impact of Scalable Data Systems and Sopris acquisitions). Both these Shares outstanding: 105mn
acquisitions are being consolidated effective 4QFY19 and hence will have the full Free float: 59%
impact on revenues for FY20. Sonata Software’s focus on “Platformation” initiatives Avg. daily vol. 3mth: 98,159
within its focus verticals ( Retail, CPG and Travel) appear to be yielding results. Sonata Source: Bloomberg

has been able to deliver strong margin performance owing to its Platforms and IP led
offerings (Selling Services along with IP). IT services Adjusted EBIDTA margin stood at Changes in the report
23.6% for FY19 which is highest among midsized peers. We retain our EPS estimates Rating: Maintained
for FY20/FY21E. Retain TP at Rs415 (13.5x FY21E EPS). Dividend for FY19 stands at Target Price: Maintained
Rs12.75/sh which translates to strong dividend yield of 3.6%. Retain BUY. Earnings estimates: Maintained
Source: Centrum Research
Steady Quarter, Inorganic impact leads to higher growth
IT services revenues came at USD43.5mn up 6.6% QoQ in line with our estimates ( Sonata Software relative to NIFTY Midcap 100
43.2mn). Organic revenue growth stood at 2.9% and rest owing to Sopris and Scalable
Data Systems acquisitions. IT services adjusted EBIDTA margin came at 22.5% down
600bps QoQ and up 260bps YoY but inline with our estimates. We note 3QFY19 had
abnormally high IT services margin led by license sale. Hence, absence the same lead to
higher sequential drop. Headcount stood at 4,042 employees for 4Q with net addition
of 75 employees. PAT for 4QFY19 came at Rs653mn was 8% ahead of our estimates.
PAT beat was led by strong other income. Management continues to expand senior
leadership and has hired 3 senior recruits to boost the Digital Consulting team.
Source: Bloomberg
PAT beat aided by higher other income
Shareholding pattern
Consolidated revenues came in at Rs8,355mn, down 1% QoQ and up 33% YoY (Cen est:
Mar-19 Dec-18 Sep-18 Jun-18
Rs6,955mn) led by higher revenue from low margin product business. IT services
Promoter 28.2 28.2 31.0 31.0
revenues came in at Rs3041mn, up 7.1% QoQ and accounted for 36% of total revenues. IT
FIIs 13.8 15.2 16.6 15.9
products business (reselling business) revenues came in at Rs5,366mn, down 4.7% QoQ
DIIs 9.8 7.8 7.0 5.0
and up 38% YoY and accounted for 64% of revenues. IT products business usually shows
Public/oth 48.2 48.8 45.4 48.1
sequential volatility QoQ. Consolidated EBITDA margin came in at 10.6%, down 100bps Source: BSE
QoQ and up 43bps YoY. Absolute consolidated EBITDA came in at Rs884mn, 5% above our
estimate. Consolidated PAT for Q4 came in at Rs653mn, 8% above our estimate.
Valuation and risks
Sonata enjoys strong competency in Microsoft Dynamics and SAP Hybris. The
company’s recent acquisitions (Scalable Data Systems and Sopris Systems) would
further strengthen its positioning in Microsoft Dynamics offerings. We expect Sonata's
IT Services revenues to grow by 17.7/13.5% for FY20/FY21E (vs 18.4/14% modelled
earlier). We model IT services Adjusted EBITDA margin at 23.4/23.6% for FY20/FY21E
(vs 23.6% for FY19). Net cash on the balance sheet is Rs3,210mn (Rs33/sh, which is
8.7% of Mcap). A robust balance sheet and strong free cash flow have helped the
company maintain superior pay-out ratios (~66% of PAT paid as dividend in FY19).

Financial and valuation summary

YE Mar (Rs mn) Q4FY19 Q4FY18 YoY (%) Q3FY19 QoQ (%) FY19P FY20E FY21E
Revenue 8,355 8,439 (1.0) 6,258 33.5 29,608 33,561 35,007
IT Services

EBITDA 884 998 (11.4) 635 39.1 3,355 3,950 4,351

EBITDA margin (%) 10.6 11.8 (124) 10.2 43 11.3 11.8 12.4
Adj. PAT 653 639 2 543 20.3 2,461 2,847 3,182
Diluted EPS (Rs) 6.3 6.2 2.1 5.3 19.4 23.7 27.4 30.7
PE (x) 14.8 12.9 11.6 Madhu Babu
EV/EBITDA (x) 9.9 7.5 6.5 Analyst, IT Services
+91 4215 9855
RoE (%) 35.0 34.5 33.7 madhu.babu@centrum.co.in
Source: Company, Centrum Research estimates

Please see Appendix for analyst certifications and all other important disclosures.
In the interest of timeliness, this document is not edited.
 Sonata Software 31 May 2019

Thesis Snapshot
Estimate revisions Valuations
FY20E FY20E FY21E FY21E We value Sonata Software at 13.5x FY21E EPS which yields a target price
YE Mar (Rs mn) % chg % chg
New Old New Old of Rs415/sh
Revenue 33,561 30,915 8.6 35,007 33,144 5.6
EBITDA 3,950 3,965 (0.4) 4,351 4,335 0.4
EBITDA margin 11.8 12.8 (103) 12.4 13.1 (67)
Adj. PAT 2,847 2,867 (0.7) 3,182 3,191 (0.3) Valuations
Source: Centrum Research estimates
EPS for FY21 31
Target P/E 13.5
Centrum estimates vs Actual results Target price 415
Centrum Actual Variance
YE Mar (Rs mn)
Q4FY19 Q4FY19 (%) P/E mean and standard deviation ( One year forward)
Revenue 6,955 8,355 20.1
20
EBITDA 841 884 5.1
EBITDA margin (%) 12 10.6 (152) 15
Adj. PAT 607 653 7.5
10
Source: Bloomberg,Centrum Research estimates
5
Sonata Software versus NIFTY Midcap 100
0
1m 6m 1 year

Sep-15

Sep-16

Sep-17

Sep-18
May-15

May-16

May-17

May-18

May-19
Jan-16

Jan-17

Jan-18

Jan-19
SSOF IN 7.4 16.2 (4.5)
NIFTY Midcap 100 2.2 2.6 (5.0) P/E Mean
Source: Bloomberg, NSE Mean + Std Dev Mean - Std Dev
Source: Bloomberg, Centrum Research estimates
Key assumptions
YE Mar FY19 FY20E FY21E
USD revenues 12.0 17.7 13.4
Average rate (USD vs INR) 69.5 71.0 70.0
EBIDTA margin (%) 11.3 11.8 12.4
EBIT Margin (%) 10.9 11.4 12.1
USD revenues 12.0 17.7 13.4
Source: Centrum Research estimates

Peer comparison
Mkt Cap CAGR FY19-FY21E (%) PE (x) EV/EBITDA (x) RoE (%)
Company
Rs bn Sales(USD) EBIDTA PAT FY19 FY20E FY21E FY19 FY20E FY21E FY19 FY20E FY21E
Mindtree 160.6 14.2 14.7 11.4 21.3 18.3 15.3 14.2 11.5 9.3 24.9 24.5 25.0
NIIT Tech 79.8 14.9 15.5 18.1 19.9 16.9 14.3 11.0 9.3 7.8 21.0 21.5 22.3
Sonata Software 37.3 15.5 13.9 13.1 15.0 12.9 11.6 9.5 8.5 6.9 35.0 34.5 33.7
Source: Company, Centrum Research estimates

Centrum Institutional Research 2

Sonata Software 31 May 2019

Quarterly result review

Fig 1: Q4FY19: Consolidated P&L
Fig in mn Q4FY19 Q3FY19 QoQ (%) 4QFY18 YoY (%) Estimate Variance
IT services Revenues (USD mn) 43.5 40.8 6.6 37.4 16.4 43 1.2
IT services Revenues (INR) 3,041 2,840 7.1 2,418 25.8 3,013 0.9
IT services Products (INR) 5,366 5,632 (4.7) 3,887 38.0 3,942 36.1
Total consol Revenues(INR mn) 8,355 8,439 (1.0) 6,258 33.5 6,955 20.1
IT Services EBIDTA 683 807 479
IT products EBIDTA 202.9 195.0 158.0
Consol EBITDA 883.9 997.6 (11.4 635.4 39.1 841.3 5.1
EBITDA Margins (%) 10.6 11.8 (124)bps 10.2 43 bps 12.1 (152) bps
PAT 653 639 2.2 543 20.3 606 7.8
Source: Company, Centrum Research estimates

Fig 2: Sonata Software’s IT services USD revenue growth QoQ

12.0% 11.3%

7.4%
8.0% 6.8% 6.5% 6.6%
Organic growth for the quarter 5.2% 5.4%
4.0% 4.3%
stood at 2.9% and rest owing 3.6% 3.4%
4.0% 2.9% 2.5% 2.7%
to Sopris and Scalable Data 1.3% 1.1%
Systems acquisitions 0.0%
0.4%
0.0%
-0.1%

-4.0% -2.9%
1QFY15
2QFY15
3QFY15
4QFY15
1QFY16
2QFY16
3QFY16
4QFY16
1QFY17
2QFY17
3QFY17
4QFY17
1QFY18
2QFY18
3QFY18
4QFY18
1QFY19
2QFY19
3QFY19
4QFY19
Source: Company, Centrum Research

Fig 3: Adjusted IT services EBITDA margins

28.4%

31.0% 72
70

27.0% 68
22.9%

66
21.7%

23.3%

22.5%
21.7%

USD Vs INR
21.6%

We present the IT Service 64

20.6%
20.9%
20.3%

23.0%
20.1%

19.8%

Adjusted EBIDTA margin which 62

18.7%
18.4%

excludes other income and

18.0%

17.7%

60
17.4%
16.7%

forex gain. Sonata’s IP led has 19.0%

16.1%

58
15.2%

led to steady expansion in 56

margin profile 15.0% 54
1QFY15
2QFY15
3QFY15
4QFY15
1QFY16
2QFY16
3QFY16
4QFY16
1QFY17
2QFY17
3QFY17
4QFY17
1QFY18
2QFY18
3QFY18
4QFY18
1QFY19
2QFY19
3QFY19
4QFY19

Adjusted EBIDTA margin (IT services) Average Exchange Rate (RHS)

Source: Company, Centrum Research

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 Sonata Software 31 May 2019

Key metrics
Fig 4: Headcount metrics
Headcount 4QFY16 1QFY17 2QFY17 3QFY17 4QFY17 1QFY18 2QFY18 3QFY18 4QFY18 1QFY19 2QFY19 3QFY19 4QFY19
Total
Headcount 3,251 3,291 3,303 3,314 3,366 3,575 3,628 3,459 3,476 3,615 3,836 3,967 4,042
Net additions (28) 40 12 11 52 209 53 (169) 17 139 221 155 156
Source: Company, Centrum Research

Fig 5: Revenue by delivery centers

% 4QFY16 1QFY17 2QFY17 3QFY17 4QFY17 1QFY18 2QFY18 3QFY18 4QFY18 1QFY19 2QFY19 3QFY19 4QFY19
Onsite (%) 43 42 45 40 43 43 45 45 41 44 42 42 43
Offshore (%) 57 58 55 60 57 57 55 55 59 56 58 58 57
Source: Company, Centrum Research

Travel vertical (28% of total revenues) up 6.6% QoQ and Retail &CPG vertical which accounts to
27% of total revenues (up 10.7% QoQ) aided growth on vertical fronts.
Fig 6: Vertical mix of revenues (%)
% 4QFY16 1QFY17 2QFY17 3QFY17 4QFY17 1QFY18 2QFY18 3QFY18 4QFY18 1QFY19 2QFY19 3QFY19 4QFY19
OPD 28 30 31 30 29 30 29 28 28 28 28 27 26
Travel 31 29 28 26 27 28 27 28 27 27 29 28 28
CPG 24 24 23 27 26 24 26 27 25 25 26 26 27
Others 17 17 17 17 18 18 18 17 20 20 17 19 19
Source: Company, Centrum Research

Fig 7: Revenue from Top 10 clients

4QFY16 1QFY17 2QFY17 3QFY17 4QFY17 1QFY18 2QFY18 3QFY18 4QFY18 1QFY19 2QFY19 3QFY19 4QFY19
Client concentration 67 70 71 70 70 70 69 71 69 70 69 69 68
Source: Company, Centrum Research

Centrum Institutional Research 4

 Sonata Software 31 May 2019

Fig 8: Quarterly Financials

Particulars (Rs mn) Q1FY18 Q2FY18 Q3FY18 Q4FY18 Q1FY19 Q2FY19 Q3FY19 Q4FY19
USD Revenues (IT services only) 32.7 36.4 37.4 37.4 37.8 39.1 40.8 43.5
Revenues (IT services only) 2,113 2,346 2,408 2,418 2,571 2,753 2,840 3,041
Revenues (IT products) 4,341 1,997 5,303 3,887 4,371 3,259 5,632 5,366
Net Sales 6,345 4,269 7,667 6,258 6,883 5,931 8,439 8,355
Purchase of Stock in Trade 4,117 1,854 5,171 3,740 4,191 3,063 5,393 5,157
Change in Inventory (20) 20 (0) 0 - - - -
Employee benefit Expenses 1,217 1,321 1,312 1,288 1,321 1,464 1,404 1,525
Other Expenses 554 527 535 595 639 664 644 789
EBIDTA 477 547 651 635 733 740 998 884
Depreciation 30 32 31 30 29 29 30 40
EBIT 446 515 619 606 704 711 968 844
Other Income 158 112 65 119 79 167 (47) 75
Net Exchange loss/ (gain) - - - - - - - -
Finance Costs 17 12 9 10 7 10 11 7
PBT 588 615 675 715 776 869 910 912
Tax 166 163 181 172 221 247 271 268
Adjusted PAT 422 452 494 543 555 622 639 644
Interest Income on Income tax refund 9 2 0 0 19 0 0 9
RPAT 432 454 494 543 574 622 639 653
QoQ Growth (%)
USD Revenue growth (%) 6.5 11.3 2.7 (0.1) 1.1 3.4 4.3 6.6
Revenue (10.4) (32.7) 79.6 (18.4) 10.0 (13.8) 42.3 (1.0)
EBITDA 8.0 14.8 18.8 (2.3) 15.4 0.9 34.8 (11.4)
PBT 14.9 4.6 9.8 5.8 8.6 11.9 4.8 0.2
Adj PAT 21.3 7.0 9.4 9.8 2.3 11.9 2.8 0.8
Margin (% )
EBITDA 7.5 12.8 8.5 10.2 10.7 12.5 11.8 10.6
EBIT 7.0 12.1 8.1 9.7 10.2 12.0 11.5 10.1
PBT 9.3 14.4 8.8 11.4 11.3 14.6 10.8 10.9
Adj PAT 6.7 10.6 6.4 8.7 8.1 10.5 7.6 7.7
Source: Company, Centrum Research

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 Sonata Software 31 May 2019

Fig 9: Consolidated Model Sheet

YE Mar (Rs mn) FY15 FY16 FY17 FY18 FY19 FY20E FY21E
USD revenues of IT services ( USD mn) 98.3 107.8 121.4 143.9 161.2 189.7 215.1
Growth (%) 23.0 9.7 12.6 18.5 12.0 17.7 13.4
Organic Revenue Growth (%) 23.0 6.0 8.5 18.5 11.0 12.0 13.4

Average Rate (USD vs INR) 61.7 65.6 67.2 64.5 69.5 71.0 70.0

IT services Revenues ( Rs mn) 6,068 7,068 8,153 9,285 11,205 13,465 15,057
Growth (%) 25.5 16.5 15.4 13.9 20.7 20.2 11.8
IT Products Revenues ( Rs mn) 10,926 12,501 17,342 15,528 18,628 20,096 19,950
Growth (%) 0.7 14.4 38.7 (10.5) 20.0 7.9 (0.7)
Consolidated Revenues ( Rs mn) 16,821 19,404 25,211 24,539 29,608 33,561 35,007
Growth (%) 7.4 15.4 29.9 (2.7) 20.7 13.4 4.3
EBIDTA ( Rs mn)
IT Services 1,294 1,406 1,415 1,737 2,647 3,146 3,553
IT Products 383 547 517 591 723 804 798
Total Adjusted EBIDTA 1,677 1,954 1,931 2,328 3,370 3,950 4,351
Adjusted IT services EBIDTA margin (%) 21.3 19.9 17.4 18.7 23.6 23.4 23.6
Adjusted IT products EBIDTA margin(%) 3.5 4.4 3.0 3.8 3.9 4.0 4.0
Total Consolidated EBIDTA margin(%) 10.0 9.9 7.6 9.4 11.3 11.8 12.4

APAT ( Rs mn) 1,305 1,549 1,460 1,911 2,461 2,847 3,182

Adjusted EPS 12.4 14.7 13.9 18.2 23.7 27.4 30.7
Growth (%) 84.9 18.7 -5.8 30.9 30.4 15.7 11.8

P/E 28.6 24.1 24.3 19.4 14.8 12.9 11.6

DPS 7.0 9.0 9.0 10.6 12.7 13.7 15.3
Dividend Payout Ratio( Ex dividend tax) 56.4 61.0 64.7 58.6 53.6 50.0 50.0
Dividend Yield(%) 2.0 2.5 2.5 3.0 3.6 3.9 4.3
ROE (%) 32.5 34.5 28.8 30.9 35.0 34.5 33.7

Consolidated Balance sheet ( R mn)

Net cash on Balance sheet 2,375 1,600 3,457 5,269 3,320 6,928 8,053
Net Cash per Share 22.6 15.2 32.9 50.1 32.0 66.7 77.5
Net Cash per share/Mcap (%) 6.4 4.3 9.3 14.1 9.0 18.8 21.8

Consolidated cash flows ( R mn)

Cash Flow from Operations 768 1,581 1,845 2,978 (65) 5,330 2,969
Capex+ Acquisition 140 848 97 65 985 100 90
FCF 627 733 1748 2,913 (1,050) 5,230 2,879
FCF/EBIDTA (%) 37.4 38.2 90.9 126.1 (31.3) 132.4 66.2
Source: Company, Centrum Research * Debtor days has seen a steep spike on balance sheet closing date owing to the Products business. This lead to negative reported operating
cash flow for FY19

Centrum Institutional Research 6

Sonata Software 31 May 2019
P&L Balance Sheet
YE March (Rs mn) FY17 FY18 FY19 FY20E FY21E YE March (Rs mn) FY17 FY18 FY19 FY20E FY21E
Revenues 25,211 24,539 29,608 33,561 35,007 Equity share capital 104 104 104 104 104
Cost of Revenue 21,032 20,018 23,517 26,590 27,505 Reserves & surplus 5,800 6,429 7,579 8,712 9,978
% of revenues 83.4 81.6 79.4 79.2 78.6 Shareholders' fund 5,904 6,533 7,683 8,816 10,082
S,G&A expenses 2,256 2,211 2,736 3,020 3,151 Total debt 353 187 0 0 0
% of revenues 8.9 9.0 9.2 9.0 9.0 Def tax liab. 0 0 0 0 0
EBITDA 1,923 2,310 3,355 3,950 4,351 Minority Interest 4 0 0 0 0
EBITDA margin (%) 7.6 9.4 11.3 11.8 12.4 Total liabilities 6,261 6,719 7,682 8,815 10,082
Depreciation & Amortisation 93 124 128 132 132 Net block 237 231 220 254 278
EBIT 1,830 2,186 3,228 3,818 4,219 Capital WIP 4 3 6 6 6
Other income 313 406.37 239.00 192.00 263.00 Goodwill 803 807 1452 1386 1320
Except. items expenses/(income) (77) (12) (28) 0 0 Intangibles 143 101 322 322 322
PBT 2,220 2,604 3,494 4,010 4,482 Investments 802 1532 1253 1353 1453
Taxes 682 681 1006 1163 1300 Def tax assets 45 124 119 119 119
Effective tax rate (%) 30.7 26.2 28.8 29.0 29.0 Current assets
PAT 1,538 1,923 2,488 2,847 3,182 Trade receivables 5,199 3,964 8,111 6,252 6,522
Minority/Associates 0.0 0.0 0.0 0.0 0.0 Unbilled
Reported PAT 1,538 1,923 2,488 2,847 3,182 Cash & Cash equivalents 3,810 4,772 3,027 6,635 7,761
Adjusted PAT 1,461 1,911 2,461 2,847 3,182 Other current assets 933 801 963 1,063 1,163
PAT margin (%) 6.1 7.8 8.4 8.5 9.1 Total current asset 9,942 9,537 12,101 13,950 15,446
EPS 13.9 18.2 23.7 27.4 30.7 Trade payables 4,482 4,323 5,873 6,657 6,944
Other current liab. &
1,233 1,294 1,918 1,918 1,918
provisions
Ratios Total current liab. 5,716 5,616 7,791 8,575 8,862
YE March FY17 FY18 FY19 FY20E FY21E Net current assets 4,226 3,921 4,310 5,375 6,583
Growth (%) Total assets 6,261 6,719 7,682 8,815 10,082
Revenue 29.9 (2.7) 20.7 13.4 4.3
EBITDA 0.2 20.2 45.2 17.7 10.1 Cash Flows
Adjusted PAT (5.8) 30.9 28.8 15.7 11.8 YE March (Rs mn) FY17 FY18 FY19 FY20E FY21E
Margin (%) Op profit bef WC changes 2,084 2,626 3,355 3,950 4,351
Gross 16.6 18.4 20.6 20.8 21.4 Change in current assets (1,764) 1,157 (4,309) 1,759 (369)
EBITDA 7.6 9.4 11.3 11.8 12.4 Change in current liabilities 2,172 (253) 1,895 784 287
EBIT 7.3 8.9 10.9 11.4 12.1 Net change – WC 408 904 (2,414) 2,543 (83)
Adjusted PAT 5.8 7.8 8.3 8.5 9.1 Direct taxes 646 552 1,006 1,163 1,300
Return (%) Net cash from operations 1,845 2,978 (65) 5,330 2,969
RoE 28.8 30.9 35.0 34.5 33.7 Capital expenditure (97) (65) (85) (100) (90)
RoCE 23.2 27.7 32.4 32.4 31.9 Acquisitions, net - - (900) - -
RoIC 36.8 66.5 72.3 80.0 134.9 Others 93 1,017 338 70 137
Turnover (days) Net cash from investing (4) 952 (647) (30) 47
Debtors 75 59 100 68 68 FCF 1,748 2,913 (1,050) 5,230 2,879
Unbilled 5 6 6 6 6 Issue of share capital 0 0 - - -
Total debtors + unbilled 80 65 106 74 74 Increase/(decrease) in debt (1,291) (259) 87 (28) (24)
Solvency (x) Dividend paid (437) (1,146) (1,588) (1,714) (1,915)
Net debt-equity (0.6) (0.7) (0.4) (0.8) (0.8) Net cash from financing (1,727) (1,404) (1,500) (1,742) (1,939)
Per share (Rs) Effect of exchange rates (26) 6 - - -
Adjusted EPS 13.9 18.2 23.7 27.4 30.7 Net change in cash 88 2,531 (2,213) 3,558 1,076
Reported EPS 14.6 18.3 24.0 27.4 30.7 Source: Company, Centrum Research estimates
BVPS 57.0 62.9 73.9 84.8 97.0
CEPS 15.5 19.7 25.2 28.7 31.9
DPS 9.0 10.6 12.7 13.7 15.3
Dividend pay-out (%) 77.7 69.7 64.5 60.2 60.2
Valuation (x)
P/E 24.3 19.4 14.8 12.9 11.6
P/CEPS 22.9 18.0 14.1 12.4 11.1
EV/EBITDA 17.6 13.7 9.9 7.5 6.5
EV/Sales 1.3 1.3 1.1 0.9 0.8
Dividend yield (%) 2.5 3.0 3.6 3.9 4.3
Source: Company, Centrum Research estimates

Centrum Institutional Research 7

Sonata Software 31 May 2019

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The projections and forecasts described in this report were based upon a number of estimates and assumptions and are inherently subject to significant
uncertainties and contingencies. Projections and forecasts are necessarily speculative in nature, and it can be expected that one or more of the estimates on
which the projections and forecasts were based will not materialize or will vary significantly from actual results, and such variances will likely increase over
time. All projections and forecasts described in this report have been prepared solely by the authors of this report independently of the Company. These
projections and forecasts were not prepared with a view toward compliance with published guidelines or generally accepted accounting principles. No
independent accountants have expressed an opinion or any other form of assurance on these projections or forecasts. You should not regard the inclusion
of the projections and forecasts described herein as a representation or warranty by or on behalf of the Company, Centrum, the authors of this report or
any other person that these projections or forecasts or their underlying assumptions will be achieved. For these reasons, you should only consider the
projections and forecasts described in this report after carefully evaluating all of the information in this report, including the assumptions underlying such
projections and forecasts.
The price and value of the investments referred to in this document/material and the income from them may go down as well as up, and investors may
realize losses on any investments. Past performance is not a guide for future performance. Future returns are not guaranteed and a loss of original capital
may occur. Actual results may differ materially from those set forth in projections. Forward-looking statements are not predictions and may be subject to
change without notice. Centrum does not provide tax advice to its clients, and all investors are strongly advised to consult regarding any potential
investment. Centrum and its affiliates accept no liabilities for any loss or damage of any kind arising out of the use of this report. Foreign currencies
denominated securities are subject to fluctuations in exchange rates that could have an adverse effect on the value or price of or income derived from the
investment. In addition, investors in securities such as ADRs, the value of which are influenced by foreign currencies effectively assume currency risk. Certain
transactions including those involving futures, options, and other derivatives as well as non-investment-grade securities give rise to substantial risk and are
not suitable for all investors. Please ensure that you have read and understood the current risk disclosure documents before entering into any derivative
transactions.
This report/document has been prepared by Centrum, based upon information available to the public and sources, believed to be reliable. No
representation or warranty, express or implied is made that it is accurate or complete. Centrum has reviewed the report and, in so far as it includes current
or historical information, it is believed to be reliable, although its accuracy and completeness cannot be guaranteed. The opinions expressed in this
document/material are subject to change without notice and have no obligation to tell you when opinions or information in this report change.
This report or recommendations or information contained herein do/does not constitute or purport to constitute investment advice in publicly accessible
media and should not be reproduced, transmitted or published by the recipient. The report is for the use and consumption of the recipient only. This
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may not be printed, sold or distributed without the written consent of Centrum.
The distribution of this document in other jurisdictions may be restricted by law, and persons into whose possession this document comes should inform
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This document does not constitute an offer or invitation to subscribe for or purchase or deal in any securities and neither this document nor anything
contained herein shall form the basis of any contract or commitment whatsoever. This document is strictly confidential and is being furnished to you solely
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observe any such restrictions. By accepting this report, you agree to be bound by the fore going limitations. No representation is made that this report is
accurate or complete.

Centrum Institutional Research 8

Sonata Software 31 May 2019
The opinions and projections expressed herein are entirely those of the author and are given as part of the normal research activity of Centrum Broking and
are given as of this date and are subject to change without notice. Any opinion estimate or projection herein constitutes a view as of the date of this report
and there can be no assurance that future results or events will be consistent with any such opinions, estimate or projection.
This document has not been prepared by or in conjunction with or on behalf of or at the instigation of, or by arrangement with the company or any of its
directors or any other person. Information in this document must not be relied upon as having been authorized or approved by the company or its directors
or any other person. Any opinions and projections contained herein are entirely those of the authors. None of the company or its directors or any other
person accepts any liability whatsoever for any loss arising from any use of this document or its contents or otherwise arising in connection therewith.
Centrum and its affiliates have not managed or co-managed a public offering for the subject company in the preceding twelve months. Centrum and
affiliates have not received compensation from the companies mentioned in the report during the period preceding twelve months from the date of this
report for service in respect of public offerings, corporate finance, debt restructuring, investment banking or other advisory services in a merger/acquisition
or some other sort of specific transaction.
As per the declarations given by them, Mr. Madhu Babu, research analyst and and/or any of his family members do not serve as an officer, director or any
way connected to the company/companies mentioned in this report. Further, as declared by him, he has not received any compensation from the above
companies in the preceding twelve months. He does not hold any shares by him or through his relatives or in case if holds the shares then will not to do any
transactions in the said scrip for 30 days from the date of release such report. Our entire research professionals are our employees and are paid a salary.
They do not have any other material conflict of interest of the research analyst or member of which the research analyst knows of has reason to know at the
time of publication of the research report or at the time of the public appearance.
While we would endeavour to update the information herein on a reasonable basis, Centrum, its associated companies, their directors and employees are
under no obligation to update or keep the information current. Also, there may be regulatory, compliance or other reasons that may prevent Centrum from
doing so.
Non-rated securities indicate that rating on a particular security has been suspended temporarily and such suspension is in compliance with applicable
regulations and/or Centrum policies, in circumstances where Centrum is acting in an advisory capacity to this company, or any certain other circumstances.
This report is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state,
country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation or which would subject Centrum
Broking Limited or its group companies to any registration or licensing requirement within such jurisdiction. Specifically, this document does not constitute
an offer to or solicitation to any U.S. person for the purchase or sale of any financial instrument or as an official confirmation of any transaction to any U.S.
person unless otherwise stated, this message should not be construed as official confirmation of any transaction. No part of this document may be
distributed in Canada or used by private customers in United Kingdom. The information contained herein is not intended for publication or distribution or
circulation in any manner whatsoever and any unauthorized reading, dissemination, distribution or copying of this communication is prohibited unless
otherwise expressly authorized. Please ensure that you have read “Risk Disclosure Document for Capital Market and Derivatives Segments” as prescribed by
Securities and Exchange Board of India before investing in Indian Securities Market.

Sonata Software
500

400

300

200

100

0
May-16 Nov-16 May-17 Nov-17 May-18 Nov-18 May-19

Sonata Software Ltd

Source: Bloomberg

Centrum Institutional Research 9

Sonata Software 31 May 2019

Disclosure of Interest Statement

Centrum Broking Limited (hereinafter referred to as “CBL”) is a registered member of NSE (Cash, F&O and Currency Derivatives
Business activities of Centrum Broking
1 Segments), MCX-SX (Currency Derivatives Segment) and BSE (Cash segment), Depository Participant of CDSL and a SEBI registered
Limited (CBL)
Portfolio Manager.

2 Details of Disciplinary History of CBL CBL has not been debarred/ suspended by SEBI or any other regulatory authority from accessing /dealing in securities market.

3 Registration status of CBL: CBL is registered with SEBI as a Research Analyst (SEBI Registration No. INH000001469)

Sonata Software

4 Whether Research analyst’s or relatives’ have any financial interest in the subject company and nature of such financial interest No

5 Whether Research analyst or relatives have actual / beneficial ownership of 1% or more in securities of the subject company at the end of the month
No
immediately preceding the date of publication of the document.
6 Whether the research analyst or his relatives has any other material conflict of interest No

7 Whether research analyst has received any compensation from the subject company in the past 12 months and nature of products / services for
No
which such compensation is received
8 Whether the Research Analyst has received any compensation or any other benefits from the subject company or third party in connection with the
No
research report
9 Whether Research Analysts has served as an officer, director or employee of the subject company No

10 Whether the Research Analyst has been engaged in market making activity of the subject company. No

11 Whether it or its associates have managed or co-managed public offering of securities for the subject company in the past twelve months; No

Whether it or its associates have received any compensation for investment banking or merchant banking or brokerage services from the subject
12 No
company in the past twelve months;
Whether it or its associates have received any compensation for products or services other than investment banking or merchant banking or brokerage
13 No
services from the subject company in the past twelve months;

Member (NSE and BSE)

Regn No.:
CAPITAL MARKET SEBI REGN. NO.: BSE: INB011454239
CAPITAL MARKET SEBI REGN. NO.: NSE: INB231454233
DERIVATIVES SEBI REGN. NO.: NSE: INF231454233
(TRADING & CLEARING MEMBER)
CURRENCY DERIVATIVES: MCX-SX INE261454230
CURRENCY DERIVATIVES:NSE (TM & SCM) – NSE 231454233

Depository Participant (DP)

CDSL DP ID: 120 – 12200
SEBI REGD NO. : CDSL : IN-DP-CDSL-661-2012

PORTFOLIO MANAGER

SEBI REGN NO.: INP000004383

Research Analyst
SEBI Registration No. INH000001469

Mutual Fund Distributor

AMFI REGN No. ARN- 147569

Website: www.centrum.co.in
Investor Grievance Email ID: investor.grievances@centrum.co.in

Compliance Officer Details:

Ashok D Kadambi
(022) 4215 9937; Email ID: compliance@centrum.co.in

Centrum Broking Ltd. (CIN :U67120MH1994PLC078125)

Corporate Office & Correspondence Address

Registered Office Address
Centrum House
Bombay Mutual Building ,
6th Floor, CST Road, Near Vidya Nagari Marg, Kalina, Santacruz (E),
2nd Floor, Dr. D. N. Road,
Mumbai 400 098.
Fort, Mumbai - 400 001
Tel: (022) 4215 9000 Fax: +91 22 4215 9344

Centrum Institutional Research 10