Sonata Software shares tumble over 12% as firm says international revenue could fall short of forecast in Q4

Sonata Software shares tumble over 12% with warnings of lower revenues for international business

Sonata Software shares declined over 12 percent during early trade on Thursday, April 17, following the company's warning about its revenues witnessing a negative influence of its international business performance for the fourth quarter of FY25.

It said revenue from the company's largest client is likely be lower than anticipated due to the ongoing trade war caused by recently imposed US tariffs.

Its international business revenue has dipped lower than estimates with revenue from its largest client turning low. As last reported, in its quarter ending December, Sonata Software's international business contributed about 25 percent of the company's overall topline.

During the earnings call for the third quarter, held in February, the company's managing director and chairperson, Samir Dhir mentioned feeling positive about its growth trajectory looking at the first half of the fiscal year. But had highlighted worries about the second half with its biggest client resorting to certain cost containment measures. He said, "So, we had a ramp down mid-to-late November, early December and now we will see a full quarter impact."

He further added that although the nature of this particular client is a stable one, the effect arising from cost containment shall be felt fully for the fourth quarter with some spill over upon the first quarter of financial year 2026. However, "This is not a permanent damage but a short-term blip we are facing right now," he mentioned at the time.

Previously, during the third quarter earnings call, the estimated decline in revenue was highlighted to be about 2.5 to 3.5 percent, as per the company's chief financial officer, CN Jagannathan. This was pertaining to its international IT services business, including a seasonal impact at the company level.

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