Sonata Software Plunges 12% on Q4 Revenue Warning from Key International Client

Shares of Sonata Software Ltd. tumbled as much as 12% in early trading on Thursday, April 17, after the company issued a revenue warning for its international business in the March 2025 quarter. The stock dropped to ₹293.9, sharply lower from Wednesday’s close of ₹335.4, amid investor concerns over weak guidance.

Revenue Hit from Largest Client

In a stock exchange filing made on Wednesday, Sonata Software revealed that revenues from its international business are likely to be lower than previously estimated. The decline is primarily attributed to underperformance from its largest client, whose contribution was expected to be stronger.

The company had previously flagged this risk in its December quarter earnings call, where MD & CEO Samir Dhir had pointed out that although growth had been robust in the first half of the year, cost containment measures by the client led to ramp-downs starting mid-November to early December.

“We had a ramp-down mid-to-late November, early December, and now we will see a full quarter impact,” Dhir had said, adding that the effect may also spill over into Q1 of FY26.

Short-Term Blip, Not Structural Damage

Despite the disappointing guidance, management attempted to reassure investors that the issue is temporary. “This is not a permanent damage but a short-term blip we are facing right now,” Dhir had noted during the February earnings call.

CFO CN Jagannathan had projected a 2.5%–3.5% decline in Q4 revenues for the international IT services business, including a seasonal impact on the overall company performance.

Stock Performance

Sonata Software’s international business contributed 25% to the company’s topline in the December quarter, according to its investor presentation. The revenue warning has compounded the pressure on the stock, which is now down 56% from its 52-week high of ₹763.7.

Even after a modest 0.6% gain on Wednesday, the stock has now declined 5.5% over the past month and 45% year-to-date in 2025, despite some recovery from its 52-week low.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.