Tata Mutual Fund-Backed IT Stock To Turn 1:1 Ex-Bonus This Week: Buy?

With a market valuation of Rs 19,788.18 Cr on the BSE, Sonata Software is a large-cap IT business that ended Monday's trading session 0.34% down at Rs 1411.30 a share. The downfall in the stock was witnessed ahead of the ex-date for the bonus share announcement.

The IT company has declared bonus shares in a 1:1 ratio and for the purpose of the same 12th December has been fixed as the record date. Due to the T+1 settlement mechanism of the company, the ex-date is also falling on the same day which means that Sonata Software will trade ex-bonus tomorrow on Tuesday.

Sonata Software Bonus Share

"We would like to inform you that Tuesday, 12th December, 2023 is fixed as the Record Date, for the purpose of ascertaining the eligibility of shareholders for issuance of Bonus Equity Shares of the Company in the proportion of 1 (One) new fully paid up equity shares of Rs. 1/- each for every 1 (One) fully paid-up existing equity share of Rs. 1/- each held, subject to the approval of Members which is being obtained by way of Postal Ballot through remote e-voting," said Sonata Software in a stock exchange filing.

Sonata Software Financials

For the second quarter that ended on September 30, 2023, Sonata Software Ltd. recorded a 10% YoY rise in net profit at Rs 124.2 crore. Sonata Software reported a net profit of Rs 112.7 crore during the same period of the previous fiscal, according to a regulatory filing from the business. The total revenue for the quarter was Rs 1,912.6 crore in Q2FY24, which was 28% more than the Rs 1,496.0 crore earned during Q2FY23. In comparison to Rs 165.7 crore during the same time in the previous fiscal year, EBITDA jumped 33% to Rs 220.5 crore in the second quarter of the current financial year.

Sonata Software Share Price Target

Deven Mehata-Equity Research Analyst at Choice Broking said, "SONATSOFTW, currently trading at 1427 levels, has demonstrated a robust performance over the past 9 weeks, consistently forming higher highs and higher lows. The bullish engulfing pattern on the weekly charts two weeks ago signals strong momentum in the stock, supporting its upward trajectory. On the daily charts, the stock is currently trading in a sideways range between 1405 and 1480 levels. Despite this consolidation, SONATSOFTW maintains its strength, trading above all significant moving averages. The momentum indicator at 66 levels further reinforces the positive sentiment."

"A potential breakout is anticipated if the stock sustains above 1480 levels. Short-term traders are advised to consider purchasing the stock above this resistance level following the breakout. For long-term investors, booking partial profits and holding remaining stocks with a trailing stop loss at 1350 levels, coinciding with strong support and the 20-Day EMA, is a prudent strategy. This approach allows for capitalizing on potential upside while managing downside risk. As market conditions evolve, staying informed and adapting strategies accordingly is crucial for successful investment decisions," the analyst further added.

Sonata Software Shareholding Pattern

During Q2FY24, the IT company booked promoters' shareholding of 28.17%, FIIs stake of 14.98%, DIIs stake of 16.38%, and public stake of 39.41%. As per the shareholding pattern of Sonata Software available on BSE for the July to September 2023 quarter, Tata Nifty India Digital Exchange Traded Fund held 14,10,201 or 1.01% stake, HSBC Mid Cap Fund held 53,64,346 shares or 3.83% stake and HDFC Technology Fund held 1,16,00,651 shares or 8.27% stake in the company.

Disclaimer

The recommendations made above are by market analysts and are not advised by either the author, nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.