1575% Dividends In FY23: Multibagger IT Stock To Declare Interim Dividend For FY24 Next Week

Computers and software consulting company, Sonata Software is among major dividend-paying stocks in the IT sector. After paying a behemoth 1,575% dividend in FY23, the company is now considering declaring interim dividend for the current financial year. The company's board members are scheduled to meet next week. The midcap stock is moving closer to its 52-week high. It has already emerged as a mutlibagger with triple-digit growth from its 1-year low.

In its regulatory filing, Sonata said, "the Meeting of the Board of Directors of Sonata Software Limited (the "Company") will be held on Wednesday 25th October, 2023, inter-alia, to:

- consider, approve and take on record the un-audited financial results of the Company (standalone and consolidated) for the quarter and half year ended 30th September, 2023.

- consider and declare an interim dividend, if any, for the financial year 2023-24."

Further, Sonata said, "Pursuant to Finance Act, 2020, dividend income will be taxable in the hands of the Shareholders with effect from April 1, 2020. Hence, the Interim dividend, if declared by Board, shall be paid after deducting tax at source ('TDS') in accordance with the provisions of the Income Tax Act, 1961. Communication in this regard will be sent to the shareholders to enable the Company to determine the appropriate TDS rates."

Notably, as per the Income Tax guidelines, dividend income is taxable under the head 'Income from other sources' irrespective of the fact that the person held securities either as a trader or as an investor.

Under section 194, since April 4, 2020, an Indian company will be deducting tax at the rate of 10% from dividends distributed to the resident shareholders if the aggregate amount of dividends distributed or paid during the financial year to a shareholder exceeds Rs 5,000. However, insurance firms like LIC India and General Insurance Corporation of India (GIC) or any other insurer are exempted from DDT on any shares owned by them.

However, if the shareholders have not registered a valid Permanent Account Number (PAN), the tax deducted will be 20% of the dividend income.

In the financial year 2022-23, Sonata paid a whopping 1,575% dividends amounting to Rs 15.75 per share.

Since November 2000, the company has declared a total dividend of 47 for its shareholders from its profitability for respective financial years.

Currently, the stock has a dividend yield of 1.44%.

On Wednesday, Sonata Software's share price neared its 52-week high of Rs 1,147.40 apiece on BSE. The stock ended at Rs 1,096.35 apiece broadly flat but in green from its previous closing of Rs 1,095.45.

From its 52-week low of Rs 493.90 apiece, the stock is currently up by nearly 122% on the exchange.

Its market cap is around Rs 15,372.19 crore.

During the June 2023 quarter, Sonata reported a PAT of Rs 120.1 crore, up by 11% YoY, while revenue from operations climbed by 13% YoY to Rs 2,015.5 crore. EBITDA of the company stood at Rs 206.4 crore, registering a robust growth of 29% YoY. Revenue in USD at 77.3 Million, QoQ revenue growth of 17.5% (4% QoQ organic growth) & YoY 36.1% in USD terms.

After the Q1 announcement, Sonata said its pipeline continues to be healthy and strong through multiple new digital wins from existing and new customers.

Sonata Software is a leading Modernization Engineering company, powered by its unique Platformation framework that brings together industry expertise, platform technology excellence, design innovation and strategic engagement models to deliver sustained value to customers.

Its partner ecosystem boasts of strong relationships with Microsoft, AWS, Salesforce, Snowflake, Google, and Industry partners and is critical to the value the company create with its clients.