The IT services company reported a consolidated net profit of ₹108.1 crore for the quarter ended June 30, 2026, marginally lower than ₹109.3 crore in the corresponding quarter last year.
Revenue from operations, however, grew 10.6% year-on-year to ₹3,279.1 crore, reflecting healthy business momentum despite a challenging demand environment for the global IT services industry.
Revenue grew, but profits couldn’t keep pace
While Sonata generated significantly higher revenue during the quarter, the additional business did not fully translate into stronger earnings.
The company’s EBIT declined to ₹142.3 crore, while the EBIT margin narrowed to 4.3% from 5.2% a year earlier, indicating that operating profitability weakened despite higher sales.
In simple terms, Sonata sold more services than it did a year ago, but earned less profit from every rupee of revenue.
That suggests higher operating costs or changes in the mix of projects offset the benefit of stronger revenue growth.
Why margins matter
For IT services companies, revenue alone does not tell the full story.
Margins are a key indicator of how efficiently companies convert revenue into profits. Even healthy revenue growth can disappoint investors if costs rise faster than billing or if companies take on lower-margin work to sustain growth.
The contraction in Sonata’s EBIT margin suggests profitability remained under pressure during the quarter despite continued business expansion.
Business momentum remains healthy
Despite the pressure on earnings, the company’s revenue growth indicates demand for its services remained resilient.
Crossing the ₹3,200-crore quarterly revenue mark also reflects the larger scale Sonata has achieved in recent years through organic growth and acquisitions.
Going forward, investors are likely to watch whether the company can improve margins while sustaining revenue growth, particularly as enterprises continue to calibrate technology spending amid an uncertain global macroeconomic environment.
Interim dividend announced
Separately, the board approved an interim dividend of ₹1.25 per equity share for FY27.
The record date has been fixed as August 14, 2026, while the dividend will be paid on or after August 24, 2026 through electronic mode.
The board also approved the unaudited standalone and consolidated financial results for the quarter ended June 30, 2026.
Shares of Sonata Software ended 1.63% lower at ₹332 on the National Stock Exchange (NSE) on Thursday, ahead of the earnings announcement.
