BackThis multibagger stock could rally further as Prabhudas Lilladher sees more upside
From ₹394 per share level in early January, the multibagger stock currently trades around ₹870 apiece
PremiumShares of IT services provider Sonata Software have given multibagger return this year so far as the stock has surged over 120% in 2021 (year-to-date) whereas it is up around 152% in a year's period. From ₹394 per share level in early January, the multibagger stock currently trades around ₹870 apiece.
Brokerage and research firm Prabhudas Lilladher sees further upside on the IT stock and recommended a ‘Buy’ rating as it expects steady growth momentum to continue for Sonata Software. It has a target price of ₹994 on the stock.
The IT company's consolidated net profit jumped to ₹91 crore in the second quarter ended on September 30, 2021. The company had recorded a profit of ₹57 crore in the same period a year ago.
The international IT services revenues of the company grew to ₹360.8 crore and domestic product and services increased to ₹605.5 crore. As per the brokerage, share of Digital revenue in IITS business at 70% (vs 68% in 1Q22 and 60% in 2Q21) has consistently increased over last several quarters.
The growth was driven by digital based competencies like Managed Cloud Services, Data & Analytics, IMS, Microsoft Dynamic Services, Prabhudas Lilladher added.
“Sonata has scaled up recruitment team, is investing in senior talent and formed large deal team to benefit from strong broad-based demand momentum," the note stated.
The company's management mentioned that demand momentum is broad-based across all geographies and verticals. They are also investing in senior talent and have on-boarded senior leaders in Cyber Security and Cloud practice. They have also created large deal team last quarter to benefit from strong demand tailwinds, the brokerage highlighted. Sonata ramped up hiring with net-addition of 313 employees this quarter (in-line with their target to add around 300 resources per quarter).
The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
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