Sonata Q4 net up 9 p.c.; looks at mkt expansion

BANGALORE, INDIA: Software solutions company Sonata Software, which declared its financial result today, is looking at increasing the client list in the European market.

The company would go beyond its major partner-cum-client TUI AG and expand into new markets.

Sonata said its consolidated net profit for the quarter ended March 31, 2010 rose by 9.05 per cent to Rs 18.78 crore. The company posted a net profit of Rs 79.87 crore for the year ended March 31, which is 4 per cent up compared to the annual profit of Rs 76.56 crore for the same period a year ago.

While speaking to CIOL after the announcement of the result, Srikar Reddy, COO and Member of the Board, Sonata Software, said that over the next 12-18 months, the company would look at direct deals from the Europe market.

“TUI AG is Europe’s leading travel group and our major client. Our European business largely involves serving TUI and its clients. However, we would now look at tapping non-TUI clients,” he said.

He explained that TUI InfoTec is a joint venture between Sonata Software Ltd and TUI AG, where Sonata owns a majority stake. About 60 per cent of the work from TUI AG is outsourced to Sonata at India, while the remaining is taken care by TUI InfoTec.

Moving forward Sonata will serve other clients, apart from TUI AG through the TUI Infotech arm. Its focus for the coming year would be around Outsource Products Development (OPD), building solutions framework, travel & tourism and Enterprise segment.

Revenue from Europe dips

The company reported a dip in the revenues from the European market from last quarter. It came around 47.77 per cent from 59.29 per cent, while USA contributed to 45.51 per cent against 39.21 per cent in the year 2008-09.

B. Ramaswamy, president and managing director, Sonata Software Limited said, “The customers are looking for more outsourcing opportunities. Our headcount in the European markets came down by 40-50 men, against other regions, because of this strategy to increase the offshoring in the region. As a result of this we could increase our margins and profits, while the revenues came down.”

He also said the company is looking at new acquisitions in Singapore and Malaysia.

The overall revenue came down to Rs.1380.44 crore from Rs. 1591.17 crore reported during the previous year. The company recommended a final dividend of 80 per cent or Re.0.80 per share for the year ended March 31, 2010.

Ramaswamy, said, “Our results reflect our relentless focus on adding value to our customers through innovation. This, along with our continuous endeavor in enhancing our solutions through technology and domain skills, has helped us in sustaining growth in a difficult year.”