homemarket NewsSonata Software tumbles 7% as Street remains unimpressed with bonus issue announcement
Sonata Software tumbles 7% as Street remains unimpressed with bonus issue announcement
Shares of the company have gone down by over 18 percent in the year so far. The company reported a 44 percent YoY growth in profit after tax (PAT) at Rs 107.7 crore for the April-June quarter. Whereas the revenue was at Rs 436.8 crores noting a 35 percent growth YoY.
Shares of Sonata Software fell as much as 7 percent on Tuesday after the company said that its board considered, approved and recommended a bonus issue in the ratio of 1:3 — that is of 1 (one) equity share for every 3 (three) equity shares held by the shareholders of the company as on the record date.
At 2:45 pm, shares of the information technology company were trading at Rs 697.50, down 48.75 points, or 6.53 percent lower on the BSE. Year-to-date, shares of the company have gone down by over 18 percent.
The company while reporting its financial results for the April-June quarter on July 25, 2022, made the announcement about the bonus issue. The allocation of equity shares is subject to the approval of shareholders through a postal ballot, the company said in a regulatory filing.
The company also added that the bonus shares once allotted shall rank side by side in all respects and carry the same rights as the existing equity shares. They shall be entitled to participate in full in any dividend and other corporate action, recommended and declared after the new equity shares are allotted.
Companies usually issue bonus shares to encourage retail participation. Stock prices decrease as the number of outstanding shares increases, making it more affordable for retail investors.
Management on the financial results
"We believe this year is going to be good for us both in terms of revenue growth compared to how it has been happening, unfolding for us and profitability, we don't expect dramatic impact or anything which is different from what we have broadly guided in this year," Jagannathan Chakravarthi, CFO, Sonata Software told CNBCTV18
Talking about the plans to have more growth in the year he mentioned that this year the company will continue to invest in sales, marketing, and other important investments.
The company is facing issues relating to the supply side which Chakravarthi mentioned will be tackled over a period of time. "This quarter one good point was that the attrition has come down from 30 percent for us to 24 percent. So we see there is a there is positivity on the supply side of people and demand has always been good for all the companies," he said.
Sonata Software reported a 44 percent growth in profit after tax (PAT) at Rs 107.7 crore for the April-June quarter as compared to the same quarter a year ago. The revenue of the company stood at Rs 436.8 crores — a 35 percent year-on-year (YoY) increase.
First Published: Jul 26, 2022 3:10 PM IST
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