Sonata Software shares fall over 12% after management warns of international business revenue

Shares of Sonata Software Ltd. fell as much as 10.5% in early trading on Thursday, April 17, after the company issued a warning about revenues from its international business during the quarter that ended on March 31, 2025.

In an exchange filing on Wednesday, Sonata Software said that its international business revenue is likely to be lower than previously envisioned, as revenue estimates from its largest client is likely to be lower than anticipated.

For the December quarter, Sonata Software's international business contributed to 25% of the company's overall topline, as per its investor presentation.

The company had spoken about one large client during its December quarter earnings call, which was held in February this year.

Sonata Software MD & CEO Samir Dhir had highlighted during the earnings call that the growth trajectory was good during the first half of the year, but the second half has seen some ramp downs due to the client's cost containment efforts.

"So, 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 although this is a very stable customer, the effect will last fully for the fourth quarter and may spill over to the first quarter of financial year 2026 as well.

"This is not a permanent damage but a short-term blip we are facing right now," Dhir had added back then.

CFO CN Jagannathan had mentioned during the earnings call that the company is expecting a revenue decline between 2.5% and 3.5% for the fourth quarter for its international IT services business, including a seasonal impact at the company level.

Shares of Sonata Software have corrected 56% from their 52-week high of ₹763.7. The stock has declined 5.5% in the last one month but its losses for 2025 are at 45%, despite some recovery from its 52-week low. The stock ended 0.6% higher on Wednesday at ₹335.4.