Sonata Software Limited (SONATSOFTW) fair value: what the stock is really worth
As of Oct 1, 2026: fair value of Sonata Software Limited ₹396, price ₹254, upside +55.9%, quality 60 out of 100. Calculated from audited financials with 26 valuation models and 37 quality factors, updated daily.
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Price vs Fair Value
White line = price, green steps = our fair value per fiscal year, dashed = 300-day average. As of Oct 1, 2026.
How to read this chart
60‑month range ₹209.40 – ₹838.68 · fair‑value band ₹210.14 – ₹512.84 · the ₹254.05 price screens below the ₹395.95 fair value. Green steps = our fair value per fiscal year (point-in-time, no hindsight). Dashed = 300-day average. As of Oct 1, 2026.
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Sonata Software Limited, together with its subsidiaries, provides information technology services and solutions in the United States, Europe, the Middle East, the Asia Pacific, the United Kingdom, Australia, New Zealand, and Ireland.
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Sonata Software Limited, together with its subsidiaries, provides information technology services and solutions in the United States, Europe, the Middle East, the Asia Pacific, the United Kingdom, Australia, New Zealand, and Ireland. The company offers GCC solution; digital contact center; product engineering; SAP modernization; application management; optima; cloud modernization, such as azure, AWS, and GCP; data modernization consist of Microsoft fabric, data privacy, and snowflake; artificial intelligence, including generative AI and agentic AI. It also provides dynamic modernization comprise migration, D365 customer experience, continuous modernization, AI-Led D365 transformation, and Microsoft power platform; customer experience includes sonata CX; COTS comprising SAP CX; hyper automation, such as RPA migration factory, digital assurance, robotic, finance, SCM, and HR process automation. In addition, the company offers managed cloud and infrastructure, quality assurance, and technology consulting services, as well as blockchain technologies. It serves banking, mortgage, lending, insurance, healthcare, life sciences, manufacturing, and retail sectors. Sonata Software Limited was founded in 1986 and is headquartered in Bengaluru, India.
Stock analysis
Sonata Software Limited (SONATSOFTW) currently trades at ₹254.05, while our model-based Fair Value estimate is ₹395.95, implying the stock looks roughly 35.8% undervalued today.
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Valuation
Bull case: the Growth Earnings group reads highest at a median of ₹458.94 per share, and 20 of the 26 models we run sit above the ₹254.05 price.
Bear case: the Asset-Based group reads lowest at ₹46.10, and 6 of the 26 models stay below the price. Evidence for this calculation is high.
Scenario range: ₹210.14 (bear) to ₹512.84 (bull), the price of ₹254.05 sits inside it. Bear and bull are the same models on cautious and optimistic assumptions, a range, not a price target.
Quality & growth
The Quality Score stands at 60/100 (solid quality), in the Technology sector.
Healthy Growth: Revenue growth appears healthy and is supported by profitability and cash-flow quality.
Sonata Software Limited reported revenue of ₹107B in FY2026 versus ₹55.5B in FY2022, a compound +17.8%/yr. Reported net income was ₹4.6B in FY2026, compounding +5.4%/yr from FY2022.
Key figures
Market cap ₹70.5B (≈ $732M) · P/E ratio 15.2 · P/S ratio 0.66 · EPS (TTM) ₹16.71 · Dividend yield 3.2% · Net margin 4.3% · Return on equity 25.7% · Return on assets (EBIT) 13.2%.
Competitive moat
Our AI-assisted moat analysis scores the competitive advantage at 43 out of 100 (low confidence).
What moves the price
The share trades about 35% below its 52-week high and 21% above its 52-week low, currently below its 200-day average.
For context, the median of 10 Technology peers we cover trades at 44% fair-value upside, at 56%, SONATSOFTW screens cheaper than that median.
Fair Value models
Bear ₹210.14Fair Value ₹395.95Bull ₹512.84
Model ⓘEach model values the company its own way (discounted cash flow, earnings, assets, dividends). The fair value above is their evidence-weighted blend, not the output of a single model. Based on fiscal year 2026 figures (about 6 months old). Earnings retained since then (₹4.34 per share) are deliberately not added.Bear ⓘBear = the cautious scenario: the same model computed with conservative anchors (lower growth, margins and valuation multiples). Together with Bull it frames a plausible valuation range, not a price target.BaseBull ⓘBull = the optimistic scenario: the same model computed with favourable anchors (higher growth, margins and valuation multiples). Together with Bear it frames a plausible valuation range, not a price target. If a model's bull case is above four times its base value, the table shows that limit with a > sign (like the overall Bull above): beyond it no assumption holds.Evidence ⓘEvidence = how well-backed THIS model's estimate is for this stock (0–100): how complete and reliable its input data are, and how well the model fits the company. The final Fair Value is an evidence-weighted blend, so better-evidenced models count more. Green ≥70, amber 50–69, grey below 50.
Growth Quality ⓘGrowth is valuable only when reinvestment earns attractive returns (Aswath Damodaran): sustainable growth depends on return on capital, reinvestment and efficiency. Basis: total company revenue over the periods shown on the cards (3Y/5Y/all years), not per share, so a merger can show up as a growth jump; per-share earnings growth is in the value-creation card.90/100
Revenue growth appears healthy and is supported by profitability and cash-flow quality.
Revenue growth 1 year
+5.4%
Revenue growth 3 years ⓘMeasures the company's TOTAL revenue from reported annual statements: compound average growth per year (CAGR) from the fiscal year 3, 5 or N years back to the most recent comparable fiscal year. Not per share: buybacks do not change this number, and a merger can appear as a growth jump. Per-share growth (which does include buybacks) is in the value-creation card.
+12.8%
Revenue growth 5 years ⓘMeasures the company's TOTAL revenue from reported annual statements: compound average growth per year (CAGR) from the fiscal year 3, 5 or N years back to the most recent comparable fiscal year. Not per share: buybacks do not change this number, and a merger can appear as a growth jump. Per-share growth (which does include buybacks) is in the value-creation card.
+20.4%
Start year 2021 (pandemic). Over 10 years: +18.6% a year
Revenue growth 21 years ⓘMeasures the company's TOTAL revenue from reported annual statements: compound average growth per year (CAGR) from the fiscal year 3, 5 or N years back to the most recent comparable fiscal year. Not per share: buybacks do not change this number, and a merger can appear as a growth jump. Per-share growth (which does include buybacks) is in the value-creation card.
+18.0%
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What shareholders gained per year (last 5 years), in INR ⓘWhat the business itself delivers per year: earnings growth per share plus the dividend yield. This is what you get IF the market keeps valuing the stock the same way: it contains no assumption about the market changing its mind. Computed per share, so buybacks count and a merger does not pass as growth. For a company that pays no dividend it is pure earnings growth per share. Period: earnings growth per share as CAGR over the last 5 reported fiscal years (annual statements), plus the current dividend yield. The start value is the median of the three years around the start, so a single crisis year (a pandemic or a write-down) does not distort the rate. Measured in INR: this currency has depreciated against the euro and dollar over the long run, so part of the nominal rate is currency erosion that never reaches a EUR/USD investor.
+14.1%
Earnings growth per share plus dividend.
Earnings per share, growth per year+10.9%
Dividend (yield on the price)3.2%
Pace: 5 vs 10 years ⓘTwo data points, not a trend model: earnings growth per share over the last 5 fiscal years against the last 10. Labelled "steady" when both rates are within 3 percentage points of each other, otherwise picking up or flattening. Shown only when ten years of history exist.10.9% vs 11.5%, steady
Profit margin 2021 to 2026 ⓘOperating margin then vs now, from reported annual statements. A falling margin after a boom year is the classic peak-earnings signal: the growth rate then leans on an inflated base.8% → 5%
Start year 2021 (pandemic)
Growth Forecast
A lot of optimism in the price
The price assumes less growth than the company has delivered so far and more than analysts expect.
What the price assumes ⓘThis turns our valuation around: instead of asking what the share is worth, it asks what growth the current price requires. It uses the cash the company keeps after all spending (free cash flow), the same discount rate as our models, five years of growth, then slowing evenly to 2 % a year by year ten. Compared with the analysts' sales forecasts extended to the same five years (at least three analysts, for context only, it does not enter the Fair Value): within 3 percentage points counts as "in line" (amber), below that little optimism (green), above that a lot of optimism (red).
+13.4%
Yearly growth needed for the next five years to justify today's price.
What forecasts expect ⓘAnalysts publish sales forecasts for the next two fiscal years. For the years after that, growth slows evenly to 2 % a year by year ten (2 % is the long-run rate our models use). Projected years are marked as such.
+8.8%
Yearly sales growth analysts expect, extended to five years.
After inflation (India: IMF forecast 4.1% a year to 2030, 4.7% from 2016 to 2025) that is about +8.9% a year for the price and +4.5% for the forecasts.
Compare Sonata Software Limited with another stock
Price, fair value, quality and upside side by side.
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Peer GroupⓘHow this stock ranks against its industry: the green marker is this stock, the band is the typical 25–75% peer range, and the tick is the median.Information Technology Services · 461 stocks
Beats the industry median on 8/14 measures
A mixed picture versus its industry peers.
Valuation
Quality Score60 · Above median
Fair Value upside+55.9% · Above median
Profitability
Return on equity (TTM)25.7% · Top 25%
Return on assets6.9% · Above median
Net margin (TTM)4.2% · Below median
Operating margin (TTM)4.3% · Below median
Growth and dividend
Revenue growth10.6% · Above median
Dividend yield (TTM)3.2% · Above median
Balance sheet
Debt / equity0.15× · Above median
Valuation Multiplesvs Information Technology Services median · lower = cheaper
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Is Sonata Software Limited (SONATSOFTW) overvalued or undervalued?
As of Oct 1, 2026, our model estimates a fair value of ₹395.95 versus a price of ₹254.05, about +56% upside (undervalued).
What is the fair value of SONATSOFTW?
Our model-based fair value for Sonata Software Limited is ₹395.95 (as of Oct 1, 2026), built from audited fundamentals. The current price: ₹254.05.
What is the quality score of SONATSOFTW?
Sonata Software Limited has a Quality Score of 60/100. It measures business quality (profitability, growth, cash flow, balance-sheet strength, investment discipline, share issuance). Market factors such as price momentum and volatility do not enter the number; they are shown separately in the detail view.
What is the price target for Sonata Software Limited (SONATSOFTW)?
Our model-based price target is the fair value of ₹395.95 (as of Oct 1, 2026) from 26 valuation models. Cautious scenario ₹210.14, optimistic scenario ₹512.84. It is a calculation from audited fundamentals, not an analyst target.
What is the Sonata Software Limited stock forecast for 2026?
Our models put fair value at ₹395.95, about +56% upside versus a price of ₹254.05 (undervalued). Cautious scenario ₹210.14, optimistic scenario ₹512.84. The calculation is refreshed regularly with new filings.
What is the revenue of Sonata Software Limited (SONATSOFTW)?
Sonata Software Limited reported trailing-twelve-month revenue of about ₹110B (latest available figure, as of Oct 1, 2026).
Does Sonata Software Limited pay a dividend?
Sonata Software Limited currently shows a dividend yield of about 3.21% relative to its recent price (as of Oct 1, 2026).
What growth is priced into Sonata Software Limited (SONATSOFTW)?
For today's price to be fair in a discounted-cash-flow model, Sonata Software Limited would have to grow free cash flow by +13.4 % per year for five years (discount rate 12.4 %, then slowing evenly to 2 % perpetual growth by year ten). Over the last 5 years revenue grew +20.4 % per year. As of Oct 1, 2026.
What discount rate (WACC) does the fair value of SONATSOFTW use?
Our models discount Sonata Software Limited at 12.4 %: a base by market capitalisation (small), damped by beta 0.38, country premium for India. The same rate applies in all 26 models.
What is a reverse DCF?
A reverse DCF turns the usual calculation around. Instead of deriving a value from assumptions, it takes today's price as given and asks: what free-cash-flow growth would a company have to deliver for exactly this price to be fair? The result is not a forecast but the expectation already priced in. For Sonata Software Limited that is +13.4 % per year a year over ten years, using the same discount rate (12.4 %) and the same formula as our fair value.
How much growth has Sonata Software Limited (SONATSOFTW) delivered so far?
Over the past 5 years revenue at Sonata Software Limited grew +20.4 % a year. The price currently implies +13.4 % per year free-cash-flow growth a year. Comparing the two shows how much confidence is in the price: if it demands more than has been delivered, the business has to accelerate for the maths to work.
How fast is the sector of Sonata Software Limited (SONATSOFTW) growing?
The median revenue growth in the sector is +9.6 % a year. That is the yardstick for the growth priced into Sonata Software Limited (+13.4 % per year a year): it shows whether the expectation is within the usual range or beyond it.
What is the free cash flow yield of Sonata Software Limited (SONATSOFTW)?
The free-cash-flow yield on the price is 5.60 %: that much free cash flow Sonata Software Limited produces per unit of market value. When it exceeds the discount rate of our models (12.4 %), the business already earns more than its cost of capital demands, and the price needs little additional growth.
What is the intrinsic value of Sonata Software Limited (SONATSOFTW)?
Intrinsic value and fair value mean the same thing: what the business is worth on its numbers, independent of the share price. For Sonata Software Limited it is ₹395.95 per share (as of Oct 1, 2026), against a price of ₹254.05. It is the blended result of 26 valuation models (cash flow, earnings, asset, dividend).
Is Sonata Software Limited stock overvalued or undervalued in 2026?
As of Oct 1, 2026, SONATSOFTW trades below its calculated fair value: price ₹254.05, fair value ₹395.95, a gap of about +56% (undervalued). The calculation is refreshed with each new quarterly report, so the verdict can change during the year.
Is fair value the same as the market price of SONATSOFTW?
No. The price is what the market pays today (₹254.05); the fair value is what the company's own numbers justify (₹395.95). For Sonata Software Limited the two are ₹141.90 per share apart. That gap is exactly why we show both numbers side by side.
How much is Sonata Software Limited worth?
The market values Sonata Software Limited at about ₹70.5B (market capitalisation, as of Oct 1, 2026). Per share that is ₹254.05; our models calculate a fair value of ₹395.95 per share.
What do the bullish and bearish scenarios say about SONATSOFTW?
Our models span a range for Sonata Software Limited: cautious scenario ₹210.14, base ₹395.95, optimistic ₹512.84 per share (as of Oct 1, 2026, price ₹254.05). The range comes from different growth and margin assumptions, not from analyst opinions.
What is the P/E ratio of SONATSOFTW?
Sonata Software Limited trades at a price-to-earnings ratio of 15.2 (as of Oct 1, 2026). A P/E on its own says little: it compares the price with ONE year of profit, while our fair value of ₹395.95 is built from several models across several years. Other multiples: P/B 3.7, P/S 0.6, EV/EBITDA 11.2.
How solid is the balance sheet of Sonata Software Limited (SONATSOFTW)?
Balance-sheet figures for Sonata Software Limited (as of Oct 1, 2026): return on equity 25.7%, debt of 0.15 per unit of equity. They feed the Quality Score of 60/100, which measures business quality independently of the share price.
How far is SONATSOFTW from its 52-week high?
Sonata Software Limited trades at ₹254.05, about 35% below its 52-week high of ₹388.02 and 21% above the low of ₹209.40 (as of Oct 1, 2026). Distance from the high says nothing about value: that is what the fair value of ₹395.95 is for.
Which stocks are comparable to Sonata Software Limited?
From the same area (Technology) we also value International Business Machines Corporation, Accenture plc, Tata Consultancy Services Limited, Infosys Limited, among others. Each of them has its own fair-value calculation on this site using the same models, so the comparison is like for like.
Is Sonata Software Limited stock attractive at the current price?
The data as of Oct 1, 2026: price ₹254.05, calculated fair value ₹395.95 (+56%), Quality Score 60/100, from 26 models. Whether that fits your horizon and risk tolerance is your call. We provide the calculation, not investment advice.
How is the fair value of SONATSOFTW calculated?
We run Sonata Software Limited through 26 models from four families: discounted cash flow, earnings models, asset and balance-sheet models, and dividend models. Every model gets the same audited fundamentals; the result is the weighted average of ₹395.95, with the spread shown as a cautious and an optimistic scenario.
Is it still worth investing in stocks now?
The global stock market currently sits 14.5 % above its aggregate fair value. Sonata Software Limited currently trades 36 % below its own fair value, and the market average says nothing about that. An expensive market is no reason to stay out and no reason to buy everything at once: keep a broad savings plan running, buy single stocks only with money you can do without, and hold part of your money liquid while the market is high. The full picture including sectors is on is it worth investing now.
What is the share price of Sonata Software Limited (SONATSOFTW)?
The closing price on Oct 1, 2026 was ₹254.05. Our model-based fair value is ₹395.95, about +56% upside (undervalued). We carry closing prices from our data provider, not a live tick.
What should I pay attention to with Sonata Software Limited right now?
Solid quality (60/100) at a price below fair value, the discount is the argument here, not the business quality. A fairly wide model range (₹210.14 to ₹512.84) leaves room in how you read the outcome.
Where does the earnings growth of Sonata Software Limited (SONATSOFTW) come from?
Earnings per share at Sonata Software Limited grew +11.6 % a year from 2015 to 2026. Broken into its drivers: revenue per share +19.1 %, EBIT margin −3.8 %, tax rate +0.2 %, residual (interest, one-offs) −2.8 %. The four rates multiply to the earnings growth rate, they do not add up. Start and end are three-year averages so a single exceptional year does not distort the result.
Key figures of Sonata Software Limited
How large is the market capitalisation of Sonata Software Limited (SONATSOFTW)?
The market capitalisation of Sonata Software Limited is ₹70.5B (≈ $732M). The stock-market value of the whole company: share price times number of shares. It is what the market asks for the entire business today.
What is the P/S ratio of Sonata Software Limited (SONATSOFTW)?
The price-to-sales ratio of Sonata Software Limited is 0.66 (P/E × margin). Price to sales: market value relative to yearly revenue. Useful when profit is thin or distorted.
What are the earnings per share of Sonata Software Limited (SONATSOFTW)?
Earnings per share at Sonata Software Limited are ₹16.71 (price ÷ EPS = P/E 15.2). Earnings per share over the last twelve months: total profit spread across every single share.
What is the dividend yield of Sonata Software Limited (SONATSOFTW)?
The dividend yield of Sonata Software Limited is 3.2% (payout 48.8%). Yearly dividend relative to the share price. 3% pays 3 per 100 invested. Below: how much of profit is used for it.
What is the net margin of Sonata Software Limited (SONATSOFTW)?
The net margin of Sonata Software Limited is 4.3% (fiscal year 2026). How much of every unit of revenue ends up as profit. 10% means 10 cents of profit per dollar of sales.
What is the return on equity of Sonata Software Limited (SONATSOFTW)?
The return on equity (ROE) of Sonata Software Limited is 25.7% (last twelve months). Profit relative to shareholders' equity, how efficiently the company works with its owners' money.
What is the EBIT return on assets of Sonata Software Limited (SONATSOFTW)?
On an EBIT basis the return on assets of Sonata Software Limited is 13.2% (avg 5y). Operating profit (EBIT) relative to everything the company owns, as a multi-year average. It describes the business model rather than one good or bad year.
What is the operating margin of Sonata Software Limited (SONATSOFTW)?
The operating margin of Sonata Software Limited is 4.3% (last twelve months). Profit from the core business (before interest and taxes) relative to revenue.
How fast is revenue growing at Sonata Software Limited (SONATSOFTW)?
Revenue at Sonata Software Limited is growing +10.6% versus a year earlier (3y avg +12.8%). How much revenue grew versus a year earlier (YoY). The 3-year average next to it puts the single year in context.
How fast are earnings growing at Sonata Software Limited (SONATSOFTW)?
Earnings per share at Sonata Software Limited are growing −0.8% versus a year earlier. How much earnings per share grew versus a year earlier.
How much net debt does Sonata Software Limited (SONATSOFTW) carry?
The net debt of Sonata Software Limited is ₹3.0B (fiscal year 2026, ≈ 0.8 yrs of FCF). Debt minus cash on hand. The note shows how many years of free cash flow could in theory pay it off.
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