SONATA SOFTWARE 2018-19 Annual Report Analysis

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SONATA SOFTWARE 2018-19 Annual Report Analysis
Thu, 18 Jul

SONATA SOFTWARE has announced its results for the year ended March 2019. Let us have a look at the detailed performance review of the company during FY18-19.

SONATA SOFTWARE Income Statement Analysis

  • Operating income during the year rose 20.7% on a year-on-year (YoY) basis.
  • The company's operating profit increased by 45.3% YoY during the fiscal. Operating profit margins witnessed a fall and down at 11.3% in FY19 as against 9.4% in FY18.
  • Depreciation charges increased by 2.7% and finance costs decreased by 29.4% YoY, respectively.
  • Other income declined by 40.0% YoY.
  • Net profit for the year grew by 29.5% YoY.
  • Net profit margins during the year grew from 7.7% in FY18 to 8.3% in FY19.

SONATA SOFTWARE Income Statement 2018-19

No. of Mths Year Ending 12 Mar-18* 12 Mar-19* % Change
Net Sales Rs m 24,539 29,609 20.7%
Other income Rs m 455 273 -40.0%
Total Revenues Rs m 24,994 29,882 19.6%
Gross profit Rs m 2,310 3,356 45.3%
Depreciation Rs m 124 127 2.7%
Interest Rs m 48 34 -29.4%
Profit before tax Rs m 2,592 3,467 33.8%
Tax Rs m 682 1,006 47.4%
Profit after tax Rs m 1,921 2,489 29.5%
Gross profit margin % 9.4 11.3
Effective tax rate % 26.3 29.0
Net profit margin % 7.7 8.3
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



SONATA SOFTWARE Balance Sheet Analysis

  • The company's current liabilities during FY19 stood at Rs 7 billion as compared to Rs 5 billion in FY18, thereby witnessing an increase of 30.8%.
  • Current assets rose 31% and stood at Rs 12 billion, while fixed assets fell 4% and stood at Rs 226 million in FY19.
  • Overall, the total assets and liabilities for FY19 stood at Rs 15 billion as against Rs 12 billion during FY18, thereby witnessing a growth of 24%.

SONATA SOFTWARE Balance Sheet as on March 2019

No. of Mths Year Ending 12 Mar-18* 12 Mar-19* % Change
Networth Rs m 6,533 7,683 17.6
 
Current Liabilities Rs m 5,478 7,163 30.8
Long-term Debt Rs m 187 0 -100.0
Total Liabilities Rs m 12,324 15,281 24.0
 
Current assets Rs m 9,525 12,468 30.9
Fixed Assets Rs m 234 226 -3.6
Total Assets Rs m 12,324 15,281 24.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



SONATA SOFTWARE Cash Flow Statement Analysis

  • SONATA SOFTWARE's cash flow from operating activities (CFO) during FY19 stood at Rs -62 million on a YoY basis.
  • Cash flow from investing activities (CFI) during FY19 stood at Rs 113 million on a YoY basis.
  • Cash flow from financial activities (CFF) during FY19 stood at Rs -2 billion on a YoY basis.
  • Overall, net cash flows for the company during FY19 stood at Rs -2 billion from the Rs 3 billion net cash flows seen during FY18.

SONATA SOFTWARE Cash Flow Statement 2018-19

Particulars No. of months 12 12 % Change
Year Ending Mar-18 Mar-19
Cash Flow from Operating Activities Rs m 2,896 -62 -
Cash Flow from Investing Activities Rs m 1,018 113 -88.9%
Cash Flow from Financing Activities Rs m -1,404 -1,660 -
Net Cash Flow Rs m 2,531 -1,597 -
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Current Valuations for SONATA SOFTWARE

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 24.0, an improvement from the EPS of Rs 18.5 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 351.6, stands at 14.9 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 4.7 times, while the price to sales ratio stands at 1.2 times.
  • The company's price to cash flow (P/CF) ratio stood at 14.1 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending 12 Mar-18* 12 Mar-19*
Sales per share (Unadj.) Rs 236.5 285.1
TTM Earnings per share Rs 18.5 24.0
Diluted earnings per share Rs 18.3 23.7
Price to Cash Flow x 17.8 14.1
TTM P/E ratio x 14.7 14.9
Price / Book Value ratio x 4.0 4.7
Market Cap Rs m 36,489 36,974
Dividends per share (Unadj.) Rs 10.5 12.8
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Ratio Analysis for SONATA SOFTWARE

  • Solvency Ratios
  • Current Ratio: The company's current ratio improved and stood at 1.7x during FY19, from 1.7x during FY18. The current ratio measures the company's ability to pay short-term and long-term obligations.

    Interest Coverage Ratio: The company's interest coverage ratio improved and stood at 103.3x during FY19, from 55.0x during FY18. The interest coverage ratio of a company states how easily a company can pay its interest expense on outstanding debt. A higher ratio is preferable.

  • Profitability Ratios
  • Return on Equity (ROE): The ROE for the company improved and stood at 32.4% during FY19, from 29.4% during FY19. The ROE measures the ability of a firm to generate profits from its shareholders capital in the company.

    Return on Capital Employed (ROCE): The ROCE for the company improved and stood at 45.9% during FY19, from 39.5% during FY18. The ROCE measures the ability of a firm to generate profits from its total capital (shareholder capital plus debt capital) employed in the company.

    Return on Assets (ROA): The ROA of the company improved and stood at 16.5% during FY19, from 16.0% during FY18. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending 12 Mar-18* 12 Mar-19*
Current ratio x 1.7 1.7
Debtors’ Days Days 59 100
Interest coverage x 55.0 103.3
Debt to equity ratio x 0.0 0.0
Return on assets % 16.0 16.5
Return on equity % 29.4 32.4
Return on capital employed % 39.5 45.9
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



To see how SONATA SOFTWARE has performed over the last 5 years, please visit here.

SONATA SOFTWARE Share Price Performance

Over the last one year, SONATA SOFTWARE share price has moved up from Rs 328.1 to Rs 351.6, registering a gain of Rs 23.5 or around 7.2%.

Meanwhile, the S&P BSE IT Index is trading at Rs 15,643.7 (down 0.4%). Over the last one year it has moved up from 14,470.3 to 15,643.7, a gain of 1,173 points (up 8.1%).

Overall, the S&P BSE SENSEX is up 7.2% over the year.

(To know more, check out historical annual results for SONATA SOFTWARE and quarterly results for SONATA SOFTWARE)

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