Sonata Software can move to Rs 28 in next six months, says SP Tulsian, sptulsian.com.
Tulsian told CNBC-TV18, “Sonata Software has recorded the 52-week low about a month back. That was largely because the Q3 result was really very bad. They have posted the losses. But if you go by the present trend, which we have been witnessing for last three-four days the stock is seen to be under accumulation. The company earlier scheduled their Q4 results for consideration on or about 19th or 20th April, but that has been postponed because they have said that the accounts are not ready and confirmatory to the new formats and all that and that accounts are expected to be considered by the board maybe in the next one week or so.”
He further added, “So going purely on the fundamentals that the Q3 results was bad but Q1 and Q2 was good results, I don’t think that Q4 should really be that bad a results. If you go by the business model of the company, they have eight development centers, 2,800 employees, presence all over in US, Europe, Middle East as well as in India. They are into the IT consulting to product development, application development, application management, into all sort of business.”
“If you go by the financials largely, because I am harping more on that, even if you forget that, even if we exclude the FY12, if I compare it, the FY11 results which had a topline of close to Rs 1,500 crore and an EPS of close to about Rs 8, I think FY13 should have an EPS of at least Rs 5 plus for the whole of the year. While in first nine months of the FY12, the company posted a topline of close to Rs 1,210 crore with an EPS of about Rs 1.”
“If you take the financials and if you take the fundamentals, the equity of the company is quite low at about Rs 10.5 crore with net worth of Rs 400 crore. So that translates into a book value per share at about Rs 39.40. So a midcap IT stock is available at 0.5 to book value.”
“In the last maybe a week or so, we have been seeing the renewed focus on all the midcap IT stocks whether you talk of KPIT Cummins, Polaris or maybe the Sonata Software as I have said that we have seen the share under accumulation. So I find that from hereon the downside is very limited, very low. It may again touch a level of Rs 18 or so for a very brief period, but I am expecting a price of Rs 28 in next six months or so.”