Shares of Sonata Software dropped by as much as 12% on Thursday after the company warned of lower revenues from its international business for the quarter ended March.
In a stock exchange filing on Wednesday, the company said that international business revenue is expected to be lower than earlier estimated, as revenue from its largest client is likely to fall short of expectations.
The stock eventually ended 6% lower on NSE to close at Rs 315.2.
In the December quarter, Sonata Software’s international business made up to 25% of the company’s total revenue, according to its investor presentation.
Managing director and CEO Samir Dhir had said during an earnings call in February that the company saw good growth in the first half of the year, but the second half had some ramp downs because of a large client’s cost containment efforts.
“So, we had a ramp down mid-to-late November, early December and now we will see a full quarter impact,” Dhir had said, adding that although this is a very stable customer, the effect will last fully for the fourth quarter and may spill over to the first quarter of financial year 2026 as well.
“This is not a permanent damage but a short-term blip we are facing right now,” Dhir had added.
Chief financial officer CN Jagannathan had said during the call that the company was expecting a revenue decline between 2.5% and 3.5% for the fourth quarter for its international IT services business, including a seasonal impact at the company level.
The revenue warning follows the impact of the ongoing trade war triggered by recently imposed US tariffs. Revenue from the company’s largest client is likely to be lower than anticipated due to this situation.