Sonata Software Q4 FY26: PAT up 25%, dividend ₹4.15

Key takeaway from the audited results

Sonata Software reported audited consolidated results for the year ended March 31, 2026, showing a profit uptick in Q4 despite a sequential revenue decline. Consolidated profit after tax (PAT) rose 25% quarter-on-quarter (QoQ) to ₹130.5 crore in Q4 FY26. Revenue for the quarter came in at ₹2,536.2 crore, down 17.7% QoQ and 3.1% year-on-year (YoY). For the full year, consolidated revenue increased 5.4% YoY to ₹10,701.2 crore, while PAT grew to ₹464.4 crore from ₹424.7 crore in FY25.

Q4 FY26 snapshot: profit up, revenue down

The quarter showed a divergence between topline and bottom line. While revenue contracted sequentially, profitability improved, and management linked margin movement to operational efficiencies and AI adoption in delivery. Sonata also disclosed audited numbers in lakhs, which align with the reported quarterly figures: consolidated net profit of ₹130.5 crore and total income of ₹2,536.19 crore in Q4 FY26.

Full-year FY26 performance: steady growth on a higher base

Across FY26, Sonata’s consolidated PAT increased 9.3% YoY to ₹464.4 crore, supported by growth in consolidated EBITDA (before other income, forex and exceptional items) to ₹741.3 crore, up 7.5% YoY. Consolidated earnings per share (EPS) for FY26 was 16.74 versus 15.3 in the previous year. The company also reported cash and cash equivalents (gross) of ₹605.5 crore and a net cash position of ₹30.7 crore.

International IT Services: margins improved, dollar revenue modest

In International IT Services, FY26 revenue was ₹2,948.0 crore, up 4.2% YoY. In US dollar terms, FY26 revenue was $128.4 million. For Q4 FY26, the segment recorded revenue of ₹779.2 crore, up 5.5% QoQ, while USD revenue was $12.4 million, described as flattish QoQ.

The segment’s EBITDA margin (before other income, forex and exceptional items) in Q4 FY26 improved to 20.2%, up 70 basis points QoQ from 19.5%. Sonata attributed the margin movement to operational efficiencies and AI adoption, alongside utilisation improving to 91.8% from 90% in Q3 FY26. The company also reported DSO of 64 days in Q4 FY26 versus 71 days in Q3 FY26 and added 7 new customers during the quarter.

Domestic Products and Services: client renewal headwind, PAT grew QoQ

Domestic Products and Services reported Q4 FY26 revenue of ₹1,759.2 crore, amid what the company described as headwinds from a large client renewal. Despite this, segment PAT rose 3.9% QoQ to ₹46.3 crore. For FY26, domestic revenue was ₹7,772.1 crore, up 5.9% YoY, while FY26 PAT was ₹171.7 crore, a 3.6% YoY decline.

Management said the impact of the client loss has been largely covered and indicated an expectation of returning to a growth trajectory during FY27, supported by new customer additions and a broader mix of offerings.

AI-led bookings: $19 million order book, $180 million pipeline

A key disclosure in the commentary was Sonata’s AI-led order book. For FY26, the AI-led order book was $19 million, contributing about 18% to total bookings, with an AI pipeline of $180 million across more than 100 clients. The company also noted an AI-led order book of $16.9 million in Q4 FY26.

Sonata said it won 2 large deals in Q4 FY26 and reported a total of eight large deals in FY26. In its commentary, the company linked these wins to its positioning in AI-led modernization programs.

Dividend and leadership transition

The board recommended a final dividend of ₹4.15 per share for FY26, subject to shareholder approval at the ensuing Annual General Meeting. Separately, the company announced a leadership transition, appointing Rajsekhar Datta Roy as CEO effective May 09, 2026.

What management expects to drive FY27

Management expressed cautious optimism on medium-term growth, with an expectation of gradual improvement driven by AI-led initiatives. The company said it aims to maintain EBITDA levels similar to current performance while being open to strategic investments, particularly in AI transformation.

For FY27 growth drivers, Sonata highlighted Technology, Media and Telecom (TMT), Banking, Financial Services and Insurance (BFSI), and Healthcare and Life Sciences (HLS). It also indicated that Retail, Manufacturing and Distribution (RMD) is expected to recover.

Key numbers at a glance

Conclusion

Sonata Software’s Q4 FY26 results highlight improved profitability and international margin expansion even as consolidated revenue fell sequentially. The company is leaning on AI-led bookings, a stated investment focus in AI capabilities, and vertical priorities such as TMT, BFSI, and HLS to support its FY27 growth expectations. Shareholders will also track the final dividend proposal and the CEO transition effective May 09, 2026.