Sonata Software Shares Bleed After Management Warns of Weak Overseas Revenue

Shares of Sonata Software fell as much as 14% in early trading on Thursday after the company cautioned against lower-than-expected international revenue for the March quarter. Revenue from its international business is likely to be lower than previously envisioned as topline estimates from its largest client is expected to be weaker than forecasts, the company informed the exchanges late Wednesday.

For the December quarter, Sonata Software's international services vertical accounted for 26% of the company's overall topline. The company’s management had also mentioned about this  one ‘large hi-tech client’ in its Q3 earnings call.

Samir Dhir, the managing director and chief executive officer of the company, had highlighted during the call that growth in the second half has been  subdued to some extent due to sudden ramp downs and one-time discounts on account of the client's cost containment efforts. 

“It is premature for us to talk about what will happen to this client in Q1. But we think sometime late Q4, early Q1, they should come back on track, but we'll probably provide a more finite update in the next quarter,” Dhir had said. The company had pegged a 2.5-3.5% de-growth for the ongoing quarter during the earnings call.

After a significant correction in the early session, some orders tried to capitalise the potential opportunity, as the stock came off lows, but still traded 7.6% lower at Rs 309.60 on the NSE. Sonata Software’s shares have faced selling pressures recently as it touched its 52-week low earlier this month and currently they are just 8% above the low. The stock has corrected 49% since the start of 2025.

The company specialises in digital transformation services, including cloud and data modernisation, enterprise mobility, and application development and serves clients across sectors such as BFSI, healthcare, telecom and retail.