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Sustained macro uncertainty and elongated client decision cycles
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Sonata Software Limited — Q4 FY26
Sonata Software reported Q4 FY26 consolidated revenue of ₹2,536.2 crore, down 3.1% YoY, impacted by domestic headwinds from a large client moving to direct billing.
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Sonata Software reported Q4 FY26 consolidated revenue of ₹2,536.2 crore, down 3.1% YoY, impacted by domestic headwinds from a large client moving to direct billing. International services revenue grew 6% QoQ in constant currency to $82.4 million, with EBITDA margin expanding 70 bps QoQ to 20.2% driven by AI-led productivity gains and utilization of 91.8%. PAT for international services grew 40.6% QoQ to ₹84.2 crore. The company won two large deals in Q4, including a core banking modernization with a global fintech. AI pipeline reached $280 million, contributing 18% of total order book. Management remains cautiously optimistic on gradual growth improvement, but macro uncertainty and elongated client decision cycles persist. Key risk: sustainability of TMT vertical upturn and potential further contraction in BFSI clients.
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AI Order Book Contribution
18%
+18pp YoY
AI-related orders now constitute 18% of total order book, up from negligible levels last year.
Large Deal Pipeline Count
11
-17 QoQ
Large deal pipeline dropped to 11 from ~28-32 in prior quarters due to conversion of two deals in Q4.
Utilization Rate
91.8%
+180bps QoQ
Utilization improved to 91.8% from 90% in Q3, driven by AI-enabled delivery efficiencies.
Onsite-Offshore Revenue Mix
32:68
+5pp offshore QoQ
Offshore revenue mix improved to 68% from 63% in Q3, aiding margin expansion.
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Guidance and risk preview
Management expects to maintain current EBITDA margin (~20.2%) in the near term, with potential investments for growth.
Management noted that client decision cycles remain elongated due to macroeconomic challenges, which could delay deal closures and revenue conversion.
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