SONATA SOFTWARE 2020-21 Annual Report Analysis

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SONATA SOFTWARE 2020-21 Annual Report Analysis
Mon, 18 Oct

SONATA SOFTWARE has announced its results for the year ended March 2021. Let us have a look at the detailed performance review of the company during FY20-21.

SONATA SOFTWARE Income Statement Analysis

  • Operating income during the year rose 13.0% on a year-on-year (YoY) basis.
  • The company's operating profit increased by 1.8% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 9.0% in FY21 as against 10.0% in FY20.
  • Depreciation charges increased by 8.3% and finance costs increased by 1.4% YoY, respectively.
  • Other income declined by 52.5% YoY.
  • Net profit for the year declined by 11.9% YoY.
  • Net profit margins during the year declined from 7.3% in FY20 to 5.7% in FY21.

SONATA SOFTWARE Income Statement 2020-21

No. of Mths Year Ending 12 Mar-20* 12 Mar-21* % Change
Net Sales Rs m 37,433 42,281 13.0%
Other income Rs m 584 278 -52.5%
Total Revenues Rs m 38,017 42,558 11.9%
Gross profit Rs m 3,728 3,794 1.8%
Depreciation Rs m 365 396 8.3%
Interest Rs m 152 154 1.4%
Profit before tax Rs m 3,795 3,521 -7.2%
Tax Rs m 1,026 1,082 5.5%
Profit after tax Rs m 2,769 2,440 -11.9%
Gross profit margin % 10.0 9.0
Effective tax rate % 27.0 30.7
Net profit margin % 7.3 5.7
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



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SONATA SOFTWARE Balance Sheet Analysis

  • The company's current liabilities during FY21 stood at Rs 9 billion as compared to Rs 8 billion in FY20, thereby witnessing an increase of 13.0%.
  • Current assets rose 24% and stood at Rs 15 billion, while fixed assets rose 14% and stood at Rs 5 billion in FY21.
  • Overall, the total assets and liabilities for FY21 stood at Rs 19 billion as against Rs 16 billion during FY20, thereby witnessing a growth of 21%.

SONATA SOFTWARE Balance Sheet as on March 2021

No. of Mths Year Ending 12 Mar-20* 12 Mar-21* % Change
Networth Rs m 6,668 9,032 35.4
 
Current Liabilities Rs m 8,311 9,394 13.0
Long-term Debt Rs m 0 0 0.0
Total Liabilities Rs m 15,921 19,280 21.1
 
Current assets Rs m 11,896 14,692 23.5
Fixed Assets Rs m 4,025 4,588 14.0
Total Assets Rs m 15,921 19,280 21.1
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



SONATA SOFTWARE Cash Flow Statement Analysis

  • SONATA SOFTWARE's cash flow from operating activities (CFO) during FY21 stood at Rs 4 billion, an improvement of 20.1% on a YoY basis.
  • Cash flow from investing activities (CFI) during FY21 stood at Rs -1 billion on a YoY basis.
  • Cash flow from financial activities (CFF) during FY21 stood at Rs -621 million, an improvement of 80% on a YoY basis.
  • Overall, net cash flows for the company during FY21 stood at Rs 3 billion from the Rs 2 billion net cash flows seen during FY20.

SONATA SOFTWARE Cash Flow Statement 2020-21

Particulars No. of months 12 12 % Change
Year Ending Mar-20 Mar-21
Cash Flow from Operating Activities Rs m 3,686 4,426 20.1%
Cash Flow from Investing Activities Rs m 1,391 -1,141 -
Cash Flow from Financing Activities Rs m -3,098 -621 -
Net Cash Flow Rs m 1,979 2,685 35.7%
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Current Valuations for SONATA SOFTWARE

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 23.5, an decline from the EPS of Rs 26.7 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 926.8, stands at 34.7 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 4.0 times, while the price to sales ratio stands at 0.9 times.
  • The company's price to cash flow (P/CF) ratio stood at 34.4 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending 12 Mar-20* 12 Mar-21*
Sales per share (Unadj.) Rs 360.2 406.9
TTM Earnings per share Rs 26.7 23.5
Diluted earnings per share Rs 26.3 23.2
Price to Cash Flow x 30.7 34.4
TTM P/E ratio x 34.3 34.7
Price / Book Value ratio x 4.0 4.0
Market Cap Rs m 96,297 97,456
Dividends per share (Unadj.) Rs 20.3 14.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Ratio Analysis for SONATA SOFTWARE

  • Solvency Ratios
  • Current Ratio: The company's current ratio improved and stood at 1.6x during FY21, from 1.4x during FY20. 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 deteriorated and stood at 23.9x during FY21, from 26.0x during FY20. 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 declined and down at 27.0% during FY21, from 41.5% during FY21. 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 declined and down at 40.7% during FY21, from 59.2% during FY20. 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 declined and down at 13.5% during FY21, from 18.3% during FY20. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending 12 Mar-20* 12 Mar-21*
Current ratio x 1.4 1.6
Debtors’ Days Days 683 532
Interest coverage x 26.0 23.9
Debt to equity ratio x 0.0 0.0
Return on assets % 18.3 13.5
Return on equity % 41.5 27.0
Return on capital employed % 59.2 40.7
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, 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 357.1 to Rs 926.8, registering a gain of Rs 569.7 or around 159.6%.

Meanwhile, the S&P BSE IT Index is trading at Rs 35,592.6 (up 1.6%). Over the last one year it has moved up from 21,839.4 to 35,592.6, a gain of 13,753 points (up 63.0%).

Overall, the S&P BSE SENSEX is up 52.5% over the year.

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

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SONATA SOFTWARE Announces Quarterly Results (2QFY22); Net Profit Up 59.4% (Quarterly Result Update)

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For the quarter ended September 2021, SONATA SOFTWARE has posted a net profit of Rs 912 m (up 59.4% YoY). Sales on the other hand came in at Rs 10 bn (up 19.8% YoY). Read on for a complete analysis of SONATA SOFTWARE's quarterly results.

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