SONATSOFTW - Fundamental Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Fundamental Rating: 3.5

📊 Core Financials Analysis

Revenue & Profitability

Quarterly PAT is stable (₹108 Cr vs ₹105 Cr), but shows slight contraction (Qtr Profit Var: -2.56%).

Strong ROE (27.3%) and ROCE (29.1%) indicate efficient capital usage and profitability.

Margins & Efficiency

High return metrics suggest solid operational efficiency.

EPS of ₹15.1 is healthy for its price range.

Debt & Liquidity

Debt-to-equity ratio of 0.30 is manageable, though higher than ideal for a tech company.

No direct cash flow data, but profitability and low debt imply decent liquidity.

📉 Valuation Indicators

P/E Ratio: 26.9 vs Industry PE: 29.1 — slightly undervalued relative to peers.

PEG Ratio: 6.54 — indicates overvaluation when adjusted for growth.

P/B Ratio: ~6.7 (Price ₹408 / Book ₹60.8) — high, suggesting premium valuation.

Intrinsic Value: Likely below current price due to high PEG and P/B, implying limited margin of safety.

🧠 Business Model & Competitive Advantage

Likely operates in IT services or software development (based on name and metrics).

High ROE/ROCE and consistent PAT suggest a scalable, asset-light model.

Competitive edge may lie in niche offerings or strong client retention, but declining FII/DII holdings (-1.08%, -0.30%) hint at waning institutional confidence.

📌 Entry Zone Recommendation

Current RSI: 40.0 — nearing oversold territory.

MACD positive — early signs of momentum.

Support Zone: ₹360–₹390 could be a good accumulation range.

Avoid chasing above ₹450 unless fundamentals improve or valuation cools.

🕰️ Long-Term Holding Guidance

Hold if already invested, especially if entry was below ₹350.

Watch for growth revival — PEG must improve for long-term compounding.

Monitor institutional activity and quarterly earnings for trend reversal.

Would you like a comparison with a peer stock or a technical chart breakdown next?

Edit in a page