SONATSOFTWNSE18 October 2022

Sonata Software Limited has informed the Exchange about Investor Presentation

Sonata Software Limited

18th October, 2022

National Stock Exchange of India Limited Exchange Plaza, Bandra Kurla Complex, Mumbai Kind Attn: Manager, Listing Department Stock Code – SONATSOFTW

BSE Limited P.J. Towers, Dalal Street, Mumbai Kind Attn: Manager, Listing Department Stock Code - 532221

Dear Sir/Madam,

SUB: INVESTORS’ PRESENTATION

Pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, we are enclosing Investors’ Presentation for the quarter and half year ended 30th September, 2022.

The above said presentation is also made available on the Company’s website www.sonatasoftware.com.

Please take the same on record.

Thanking you,

Yours faithfully For Sonata Software Limited

Mangal Kulkarni Company Secretary, Compliance Officer and Head-Legal

Encl: As above

Sonata Software Limited - SSL Registered Office: 208, T V Industrial estate, 2nd Floor, S K Ahire Marg, Worli, Mumbai – 400 030 Corporate Office: APS Trust Building, Bull Temple Road, N. R. Colony, Bangalore - 560 019, India Tel: +91 80 6778 1999 | Fax: +91 80 2661 0972 | CIN : L72200MH1994PLC082110

Website: www.sonata-software.com email: info@sonata-software.com

Sonata Software Investor Presentation

Q2’23

PlatformationTM Makes the Difference

www.sonata-software.com

Sonata - A Snapshot

The Company

36 YEARS as a IT Solutions Provider

$700+ M REVENUE 23% 3 Yr. CAGR

5600+ TEAM across US, Canada, EU, Asia, ANZ, Japan, Malaysia, and China

SEI CMMI L5, ITIL & ISO certified

Industry Focus

CPG & MFG Consumer Goods, Industrial Goods, Wholesale

RETAIL Apparel, Hard Goods, Grocery, Hypermarket

TRAVEL TO, OTA, Airline, Rail, Hotel, Cruise

SERVICES Energy & Utilities, Oil & Gas, Specialty Contractors & Professional Services

AGRI & COMMODITY Agri manufacturers & commodity Traders

SOFTWARE VENDORS ERP, SCM, Retail, Travel

Competencies

DIGITAL Omni-channel, Mobility & IoT, Analytics, Cloud

APPLICATION LIFECYCLE SOLUTIONS ADM, Testing, IMS Managed Services

PLATFORM IP Brick & Click Retail, Rezopia Digital Travel, Modern Distribution

Credentials

CUSTOMERS Global Top 5 – Leisure Travel Co, Grocery Retailer, F&B CPG Co, Software Co

TECHNOLOGY Microsoft, SAP, Oracle, Open Source, IBM

Strategic acquisitions and investments Microsoft – Inner Circle, SAP Pinnacle Award, Microsoft Country Partner of Year India

TECHNOLOGY INFRASTRUCTURE SOLUTIONS Software, Cloud, Server & Storage, Systems Integration

FINANCIAL National Stock Exchange Listed Public Ltd Co

A Global IT Solutions Organization, with focused Industry Verticals, versatile Portfolio of Services covering wide range of Technologies and delivering value through our unique Platformation™ approach

Global spread and locations

Canada (Richmond)

UK (London) & Ireland (Dublin)

Europe Netherlands, Denmark, France, Germany

Redmond Development Center

Mexico

Eastern Europe

Middle East & Africa Qatar

North America Atlanta, GA Fremont, CA Bridgewater, NJ Florida

APAC China Japan Korea Philippines Thailand Vietnam Singapore Malaysia

Development Centers - 11

Engagement Footprint and Sales Offices - 14

Partners - 6

Global Delivery centers in plan - 4

Indonesia and Phillipines

India Development Centers: Bangalore (3) Hyderabad (2) Offices: Bangalore, Chennai, Delhi, Hyderabad, Kolkata, Pune, Mumbai

Australia Brisbane, Sydney Melbourne

Sonata Vision

A world class firm that is a benchmark for Catalyzing Business Transformation for our Clients, Fulfilling Employee Aspirations & Caring for our wider Community

through Depth of: Thought Leadership Customer Centricity Execution Excellence

For the Customers IT Partner of choice for transformation thru deeper industry, technology & customer focus

For the Employee A fun & fearless environment where the potential & passion for work flourishes

For the Community CSR initiatives to support IT needs of projects with Social impact

Focus Areas

Business Consulting

Data & AI

DIGITAL TRANSFORMATION Using PLATFORMATIONTM

Customer Experience

Digital

Assurance

Cloud Transformation

Platform Engineering

Dynamics

Expertise through IP’s

Brick and Click

Modern Distribution

Agri Business

Rezopia

Service Industry

GBW

Sonata’s approach to digitizing businesses using platforms

PLATFORMATION™

OPEN

SCALABLE

CONNECTED

INTELLIGENT

Platforms - the secret behind the digital economy’s most successful companies

Platformation™ a unique proprietary methodology for Digital Transformation

Sonata’s structured process for Platformation

Unique Platformation Realization

• Digital Business Process and industry blueprint

• Platformation consulting and assessment

led

services

• CDAT (client digital agenda template) based

• Cloud Engineering (Cloud Native

approach

Development)

• Platform Maturity Assessment (Separate

Business & Technology maturity assessment)

• Data Platformation Methodology (Structured Assessment of Data Infrastructure & Platform)

• Platform Characteristic technology

• Accelerated Platform Engineering (Solution

assessments (With a 16 point Framework)

Accelerators)

• Marchitecture™ aligned to CDAT

•

IPs aligned to Platformation™

Focused Vertical – Key Strategies

Travel

• Leverage for other digital natives and

travel enterprises

• Sharper Positioning and alliance • Customized Solution to cater to the key drivers of each industry segment

Retail

• Domain led Implementation &

Engineering

• Build a Local ecosystem Advisories &

Rainmakers

• Aligned Sales structure •

Investing; Local Retail Industry Experts, Consulting & Solution teams

• Creating Brand Recall & Marketing-

with Microsoft & Analysts

• Build/Scale capability & align IPs on

Microsoft Retail industry cloud

Dis., Agri & Mfg

•Joint branding with Alliance around Agri Cloud •Focus on Top 100 Agri Alliance EOU accounts, Direct channels •Aligned sales & presales structure •Ecosystem Partnerships- Local Agri Industry Bodies and Rainmakers •Build/Scale capability in Agri Cloud & enhance IP

Growing deeper into focused industries with, GTM Solutions & Partner Ecosystem to become strategic, long term digital and managed services partner to our enterprise grade clients.

Health Care

• Enterprise Digitalization, • Data Intelligence • Alliance: Microsoft, AWS, Sinequa

ISV/Hi-tech

• Sharper Segment focus • New segments – Digital Natives,

Connected Platforms

• Longer term and Digital PODs kind of

engagements

• Dedicated sales and presales in markets • Marketing investment – new branding,

events and analyst coverage

• New hyperscaler, ecosystem partnerships

Microsoft relationship – jointly driving customer success

30 Years MICROSOFT PARTNER

GISV, lSP, CSP, ISV Dev Centre, SI. Global alliance footprint

400+ Clients ACROSS THE GLOBE USA, Europe, Asia, India, Australia, Middle East

$495 million/annum REVENUE TO MICROSOFT 36.7% YoY Growth , Cloud Mix 77.3%

2500+ TEAM On Microsoft Technologies with 1500 + on Microsoft Biz Apps 300 + on Microsoft Azure

18 Gold CERTIFIED COMPETENCIES 10 ADVANCED SPECIALIZATION Dynamics 365, Microsoft Azure Expert MSP, Data Analytics, Teams, CAF, M365, Azure

JOINT EXECUTION

Microsoft FastTrack, Global Delivery, Microsoft Consulting Services

CATALYST LED SALES PROCESS Industry Point of View, Business Value assessment, Envisioning Workshops, Design Thinking

INDUSTRY CLOUDS GO TO MARKET Retail, Agri, Sustainability, Manufacturing

INDUSTRY DIGITAL TRANSFORMATION

Retail, Consumer goods, Distribution, Agri Manufacturing, Service, Healthcare, ISV

Celebrating 30 years of partnership with Microsoft

Microsoft Sell to- Building on 360 degree synergy

Key Strategies • Expanding existing groups and opening of new groups • Strategic Partner for Dynamics 365 BizApps portfolio – F&O, C&E and Power

Platform

• Focus :“Microsoft on Microsoft – First party implementations of Biz Apps. • Get C& AI in growth mode for growth in Product Engineering and IT • Scale New programs for Next Gen Service offerings and Customer Success and

Data

• Invest in relationship building – across product and functional groups • Investments : Global delivery center expansions, Marketing and Sales team,

Architects onsite to accelerate

• Scale our delivery structure and resource onboarding • Setting up CoE • Continuous focus in customer service domain in emerging & growth segment • Most new win are for transformational and modernization work • Multi year contracts • Vertical expansion from traditional to new high growth vertical

Focused offerings • Product Engineering; Product Support • CE&S and Data and Analytics • new service lines – Cx, BPM, Digital Support • BizApps full stack • Power Platform

Microsoft Sell With - Biz Apps & Cloud and Data

Biz Apps (Dynamics)

Cloud and Data

(Avg qtr rev. rate past 3 years)

CAGR

16%

•

Key Highlights • • •

60% Modernization | 8 large deals | Annuity Recognized for Modernization opportunities Quality of accounts and of deals better – Platformation led, Larger Multi Geo, Multi Stack Existing customer Adjacencies leading to broad-based engagement

Offering

Modernization

Customer Segment

Customers on Microsoft AX, CRM, GP, NAV

Transformation, Implementation & Rollouts

Legacy landscape on Non-Biz Apps

CCOE- Managed Services, Workload expansion, Engineering, Power Platform

Existing Dynamics (Sonata & Non-Sonata) Large surround areas

Focus GTM • • • • • • •

Focus to get large Dynamics Transformation deals Industry Themes and Industry cloud-based offerings Work with SAS team- Compete, Full stack migrations Get alliance Status in other Geos Co-Sell Alignment with MS Enterprise & major accounts Joint demand gen/ marketing with alliance teams in all Geos Improve Direct Demand generation & marketing

Capability • •

Build Transformation capability-Consulting, OCM, Domain Build Skills- New Biz Apps components, Industry Cloud, collaborative apps (Office, Teams) & Microservices Large Program Delivery Geo local presale presence Investing in enhancing IP’s

• • •

(Avg qtr rev. rate past 3 years)

Key Offerings •

Full stack Modernization for cost takeout

CAGR

26%

•

Platform Engineering for Business Agility

Data platforms for smarter and connected business

Alliance Positioning

• • •

Full stack Modernization for cost takeout Platform Engineering for Business Agility Data platforms for smarter and connected business

GTM Focus : •

Broad based partner for existing account

•

• • NBD • • • •

Data services - annuity business – larger data pool of work Cloud/ Data modernization

Sharpen current offering - Platform Engg, Data Direct NBD – sharpening Pull and Direct sales approach Alliance offers for modernization/transformation deals Alliance led – SaS led , Field led

Status - Azure Expert MSP, Advance specialization, AMMP Sharper Positioning and alliance packaged offering Managed status for cloud in 2 geos, and in 2 Industries

Alliance status and recognition: • • • Capability • • • • •

In market presale presence – ANZ, Europe, North America Investing in creating demos Cloud Management Tools for automation of managed services, Building capacity and bandwidth Technical leads and architects

Healthy Deal Wins

We have added new clients across different industries – Retail, BFSI, Mfg, and Travel. We will continue to focus on Enterprise clients to accelerate our growth across the markets we operate.

A telecom provider chose Sonata for implementing CRM Solution for its newly merged entity. This would involve streamlining of business processes across the merged entity and implementing CRM solution.

An automobile members club providing insurance, banking and roadside assistance has chosen Sonata for its Digital transformation program which will start with implementation of ERP for its Finance, retail and Supply Chain functions across all its locations.

A Human Capital Mgmt solutions company awarded Sonata for multi yrs manged service deal for Modernization of current suite of products of -LMS on AWS including UI/UX Modernization, Sustenance activities to start with & Feature enhancements in the future, Engineering support

A premier high quality flexible packaging manufacturer has chosen Sonata as its Modernisation partner. The program will start with modernisation of their ERP followed by data modernization.

A large ferry services company has awarded Sonata contract to maintain and support its SAP Commerce Cloud implementation. This will also include enhancements to the functionality.

Going forward strategy – drive innovative value-based outcomes.

• Pivoting towards Managed Services

contracts.

• Proactively for 3+ years (renewals + new

business).

Annuity Mix

Large Deal Pipeline & Conversion

• Proactive large deals & open new buying

centers in existing clients.

• Leveraging market connects (Deal

advisors, Rainmakers, Client connects) to increases sales pipeline.

• Collaborate with Competency Center to create market relevant GTM solutions. • Forging partnership with Hyperscalers

(Azure, AWS & GCP).

• Exploring partnership with PE firms to be their Digital System Integrator (OneVista, TrueNorth).

Depth of Client Relationship

•

Increased interaction & coverage with Client Execs.

• High responsiveness and call to action on

red projects.

• Highlight value delivered beyond

contractual obligations.

Sales Rigor

Focus on value differentiation layers; Sales Rigor – MHA, OB, Pipeline, Deal Desk, Sales Productivity.

MS Partner Sales Channel

Continuous focus on leveraging the MS sales channel to increase the order book and deal intake.

With a team nurtured to make a difference

Deeper roles

Regular exposure to newer technologies, evolving business scenarios, and building cross-functional expertise

Customer impact

Continuous exposure to clients to assess business impact of solutions delivered

Freedom to contribute

Our flexible working style encourages ideation within broad boundaries

Growth

Early identification, mentoring, and nurturing of talent for growth by senior leaders

“We need to take a pause and appreciate the drive and determination we have seen from every player on what is a complex effort and delivery. We commend you all for your effort…keep up the good work!”

- Director – Platform Systems, US Travel Leader

Talent-driven business results

Talent Attraction and Fulfilment

• Increased talent intake • 3-fold increase in campus hires • 2-fold increase in hiring women talent

Talent Engagement & Retention

• Steady decline in attrition • Increased employee engagement through targeted

interventions

• Increased avenues for developing women leaders

Talent Development

training hours in H1’23

• >70% certified through Unified Engineering Model

• Increased investments in capability with >65k

Life of a Sonatian – a home away from home!

Vision & Values aligned to individual purpose Customer & People success, Innovation, Winning teams, Growth mindset, Diversity & Inclusiveness, Social citizenship

Constant upskilling & training

~10% of workforce upskilled through cross-training

~60% covered through Unified Certification Programs

Diverse & Inclusive workplace Employees of more than 17 nationalities thriving and contributing to our success

Robust Employee Engagement & listening systems >80% score on Sonatian Experience; leading to lower attrition

Career Growth

• >70% of leadership (SM) grown from

within

• Avg. tenure: Senior management ~13 yrs and middle management ~9 yrs

Financials

Strong Execution

International Business

Domestic Business

Platformation™, IP & Alliance led growth

Very large deals, Consistent absolute gross margin growth

Deeper revenue mining from existing customers

Strong Customer Retention & growth in Market share

Strong Pipeline and Acquiring new clients

Strategic shift towards cloud

Strong sales hunting leading to acquiring of new clients

Addition of new strategic business lines for expansion

Margin levers

Multi year annuity license sales

High-end digital services

Leading ROCE and ROE

Financial Management

Realization & High margins

DSO

Cash Management

Returns %

Sound capital allocation

Focus on Reduction of DSO days with efficient working capital management

Improved DSO from 44 days in FY 20 to 37.5 days in FY 22

Very strong positive cash generation and cash position.

Company is maintaining a liquidity of ~Rs. 600+ cr at all the times

Focus on high revenue rate realization and high margins business

Improved Int. EBITDA Margins from 26.3% in FY 20 to 27.6% in FY 22

Industry leading ROCE and ROE

Improved ROCE from avg 30.6% in FY 20 to avg 37.4% days in FY 22

Sound capital allocation with judiciously

Company has paid a dividend of Rs. 221 cr highest in its history.

Margin Lever

We are continuously working on the below margin lever to ensure highest profitability.

Pyramid Focus on pyramid correction

Fixed bid projects where we have flexibility in staffing projects “”

Margin Lever

Billability %

Billing Rates

Global delivery footprint • Opened new DC in Ireland, Canada & Mexico

Consistent Growth Over Last 10 years

Consolidated Revenue & EBITDA

International Services Revenue & EBITDA trend for last 12 Quarters

Revenue (in crs)

EBITDA (in crs)

Financial Performance of International Services – Q2 FY23

Revenue in INR. Cr

EBITDA

Revenue in $ Mn

PAT

International Business Revenue Growth

Revenue in $Million

New Customer added

Client Concentration

No. of $Million Customers

Q3 22

Q4 22

Q1 23

Q2 23

Operational Performance – Q2 FY23

Revenue by Geography

No. of Customers by Geo

116

Europe

India Middle East

Asia

ANZ

No. of Customers by industry

Customer Category

Vertical Mix – Q2 FY23

Revenue by Vertical Mix

Service Mix – Q2 FY23

Revenue by high end Service Mix

International Business

Digital Revenue %

PlatformationTM Revenue %

International Business - Revenue Enablers

Revenue by Onsite / Offshore Mix

Utilization & Billability

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

69%

72%

74%

75%

Offshore

Onsite

31%

28%

26%

25%

Q2 22

Q3 22

Q4 22

Q1 23

Q2 23

110%

100%

90%

80%

70%

60%

50%

40%

89%

80%

90%

81%

91%

82%

91%

82%

91%

82%

Billability

Utilisation

Q2 22

Q3 22

Q4 22

Q1 23

Q2 23

Revenue per Billable HC (USD)

Human Capital

Overall Headcount

Headcount by Business Type

5,600 5,400 5,200 5,000 4,800 4,600 4,400 4,200 4,000 3,800 3,600 3,400 3,200 3,000

5,025

278 217

4,850

276 215

5,158

5,208

280 200

292 220

4,359

4,530

4,678

4,696

5,611

307 212

G&A

S&M

5,092

Delivery

Q2 22

Q3 22

Q4 22

Q1 23

Q2 23

Domestic Business – Gross Contribution

Domestic Business - Revenue

Domestic Revenue (Annuity/Others)

Domestic Revenue (Cloud/Non Cloud)

Domestic business major revenue contribution from multi year annuity enterprise sales

Domestic Business - Gross margin Analysis by customers

Domestic Customer Count

Domestic Customer by GC %

Top ~ 48 customers contribute to about 80% of Gross Margin Strong customer retention - ~ 71% of Gross Margin contributed from customers associated for more than 5 years Established customer base - ~72% Gross Margin from customers with revenue greater than 1,000 crs

EBITDA, PBT and PAT – Last 12 Quarters

Domestic Business EBITDA

Domestic Business PBT

Domestic Business

50.0

40.0

30.0

20.0

10.0

0 7 2

2 3 2

5 2 2

9 6 1

1 7 4

0 4 4

5 9 3

9 6 3

8 1 3

4 2 3

7 3 3

50.0

40.0

30.0

20.0

10.0

8 4 2

0 2 2

0 1 2

8 5 1

1 5 2 2 8 1

4 5 4

0 3 4

5 8 3

4 5 3

3 0 3

0 1 3

9 1 3

3 7 2 6 9 1

Q2 20

Q3 20

Q4 20

Q1 21

Q2 21

Q3 21

Q4 21

Q1 22

Q2 22

Q3 22

Q4 22

Q1 23

Q2 23

Q2 20

Q3 20

Q4 20

Q1 21

Q2 21

Q3 21

Q4 21

Q1 22

Q2 22

Q3 22

Q4 22

Q1 23

Q2 23

Domestic Business PAT

1 4 3

8 1 3

5 8 2

4 6 2

6 2 2

0 3 2

9 3 2

1 8 1

6 6 1

1 6 1

6 3 1

4 2 1

6 1 1

40.0

35.0

30.0

25.0

20.0

15.0

10.0

5.0

Q2 20

Q3 20

Q4 20

Q1 21

Q2 21

Q3 21

Q4 21

Q1 22

Q2 22

Q3 22

Q4 22

Q1 23

Q2 23

Strategic Investment (In crs)

M&A Investment

58.1

46.3

39.5

13.4

4.3

FY 18

FY 19

FY 20

FY 21

FY22

60.0

50.0

40.0

30.0

20.0

10.0

IP & R&D Investment

28.3

28.1

25.2

20.4

22.2

S&M Investment

62.9

49.2

42.2

52.3

45.0

70.0

60.0

50.0

40.0

30.0

20.0

10.0

FY 18

FY 19

FY 20

FY 21

FY22

FY 18

FY 19

FY 20

FY 21

FY22

30.0

25.0

20.0

15.0

10.0

5.0

Lower S&M cost in FY22 due to reduction in travel cost

International and Domestic ROCE & RONW

ROCE

RONW

Capital Allocation (INR Lakhs)

Cash Deployment

7 2 9 4 2

8 0 4 3 1

3 5 2 9 1

2 4 0 1 1

3 9 6 7 2

5 9 2 1 2

6 9 3 4 2

2 2 7 4 1

9 6 3 3 1

1 6 3 7

9 5 8 5 1

4 6 4 9

4 3 6 5 1

4 6 4 9

9 5 6 7 3

3 8 0 2 2

7 4 0 2 2

FY'15

FY'16

FY'17

FY'18

FY'19

FY'20

FY'21

FY'22

H1'23

Cosnol Pat

Share H Payout

Capex

Share holder Pay out

47%

Acuqisition

Invested

39%

10%

Days Sales Outstanding

Credit Management – Domestic Business

Domestic Business

1,464

1,343

1,099

1,051

1,041

946

761

606

170

175

203

219

190

175

211

162

199

r c

s r n

t n u o m a

1,600

1,400

1,200

1,000

800

600

523

400

200

Q2 21

Q3 21

Q4 21

Q1 22

Q2 22

Q3 22

Q4 22

Q1 23

Q2 23

Revenue

Networking Capital

Thank you

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