Sonata Software Shares Surge 9% On Strong Margins And AI Deal Wins

Shares of Sonata Software jumped as much as 9% on Friday, 8 May, after the company reported a better-than-expected operational performance for the March quarter. The rally marked the stock’s biggest single-day gain in nearly a month, with investors reacting positively to margin expansion, fresh deal wins, and rising traction in artificial intelligence (AI)-led services.

At 11:35 AM, Sonata Software shares were up 7.22% at ₹290.30. Over the last one month, Sonata Software shares have gained 19%, although the stock still remains far below its 52-week high of ₹452.8.

Why Did Sonata Software Shares Rise?

One of the key triggers behind the rally was the company’s improvement in profitability despite weaker revenue. Sonata Software reported a 17% fall in its topline during the March quarter, mainly because of softness in its domestic business. Even with that decline, the company managed to improve its operating performance.

Earnings Before Interest and Tax, or EBIT, rose 5.6% compared to the December quarter. Margins also expanded by 160 basis points sequentially, which signalled better cost control and stronger execution.

The company also announced two large deal wins during the quarter. One of them involved an AI-led platform modernisation project for a global fintech company, while the second was a modern engineering engagement with a private equity-backed software holding firm.

According to Sonata’s investor presentation, 37% of its large deal pipeline now comes from Fortune 500 clients, showing stronger traction among global enterprises.

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AI And Cloud Business Continue To Grow

Artificial intelligence remains a major growth area for the company. Sonata Software said its AI-led pipeline has now reached $335 million. Out of this, nearly $13.7 million worth of AI-specific deals have already been secured.

The company is also seeing rising contributions from its cloud and data business. This segment accounted for 65% of Sonata’s total revenue in FY26, compared to 52% in FY24. Cloud and Data services now make up 57% of the active business pipeline.

Apart from operational performance, the board also approved a dividend payout of ₹4.15 per equity share. The proposal will now be placed before shareholders for approval at the upcoming annual general meeting.

Investors appeared to welcome both the improving margins and the company’s sharper focus on AI and cloud-driven opportunities, helping the stock extend its recent recovery.

Sources:

Business World

CNBC TV18