SONATSOFTWNSE25 October 2023

Sonata Software Limited has informed the Exchange about Investor Presentation

Sonata Software Limited

25th October, 2023

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 Sirs/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, 2023.

The above said presentation is also made available on the Company’s website www.sonata-software.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: Tower-A, Sonata Towers, Global Village (Sattva Global City), RVCE Post, Kengeri Hobli, Mysore Road, Bengaluru - 560059, India Tel: +91 80 6778 1000 | CIN: L72200MH1994PLC082110

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

Investor Presentation

Q2 FY’24

Sonata at a glance

We are a Modernization and a Digital Engineering company powered by our unique PLATFORMATION™ framework.

The Company

38 YEARS IT Solutions Provider

$990M+ Revenue 15.4% CAGR across 10 years

Listed (SONATSOFTW) Market Cap $ 1.8B

~6500 Employees Across US, EU, Asia & ANZ. 17 different nationalities

Delivering Outcome-based Modernization Services

Cloud

Managed Services

AI & Data

Dynamics

Automation

Digital Contact Center

Digital Transformation Using PlatformationTM

Serving our Global clients with right Talent mix (Global & Local Talent)

Canada Offices: Toronto Richmond

Europe Netherlands Denmark Germany

Eastern Europe

APAC China Japan Singapore Malaysia Korea Philippines Thailand Vietnam

UK (London) & Ireland (Dublin)

Indonesia and Phillipines

North America Development Center: Redmond

Offices: Atlanta, GA Fremont, CA Bridgewater, NJ East Brunswick, NJ Florida Dallas Minneapolis Warren, PA Minnesota

Costa Rica

Mexico

Middle East & Africa Qatar

Development Centers & Sales Offices - 27

Partners - 4

Global Delivery centers recent/InProgress - 6

India Development Centers: Bangalore (3) Hyderabad (2) Chennai

Offices: Bangalore Chennai Delhi Hyderabad Kolkata Pune Mumbai

Australia Brisbane Sydney Melbourne

Key Verticals, Partners, IPs

Industries

Ecosystem: Partnerships Tech + Domain

TMT: Technology, Media and Telecom

RMD: Retail, Manuf., Travel and Distribution

BFSI: Banking, Financial Services and Insurance

HLS: Healthcare and Life Sciences

Emerging

Innovative IPs

LISA Chatbot (Conversational AI)

Workbox.io (Archival)

Lightning Build

Sustainability Target: Carbon Neutrality by 2030

Single Use Plastic Free certified by FY 24

Aim for 100% Tier 1 suppliers on ESG compliance and training by FY 24

UNGC Signatory by FY2024

SbTi Commitment by FY4

Our Objective and Goal

Objective:

Goal:

Be the fastest-growing Modernization Engineering company

Revenue of $ 1.5B by FY 26 end. Intl EBITDA @ low-20’s

Our Performance Vision: Making progress and adapting to changing times…

Revenue Growth (In $M)

SCALE – Key Drivers

~$1.5B

+$580M

$0.92B

Microsoft sell-to; Dynamics

Harvest

Sustain SITL momentum

Retail, Manufacturing, Travel and TMT

Invest

Sales, Large deals, BFSI, Healthcare Life Sciences and technical capabilities

FY23

3-4 Years

Diversify

Clients: Build multiple large accounts.

Brand: Global brand in Modernization

In Q2 we crossed $80M right after crossing $75M in Q1

Intl. Services Rev. $M

SITL GC INR Crs

53.4

55.7

56.8

57.8

60.5

80.9

77.3

65.8

50.8

53.6

56.7

58.1

45.1

47.4

61.8 62.4

Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 Q2'24

Stock Return of 100%+ For Our Shareholders over the past one year

600%

500%

400%

300%

200%

100%

0% 29-Sep-18

460%

Total Return to Share Holders

226%

Stock Price Return %**

105%

184%

Div Yield

1 Yr

5 Yrs

382%

* Till Sep 29, 2023

29-Mar-19

29-Sep-19

29-Mar-20

29-Sep-20

29-Mar-21

29-Sep-21

29-Mar-22

29-Sep-22

29-Mar-23

29-Sep-23

Sonata Soft

Nifty IT

Nifty50

Market Data

NSE Symbol

Market Cap**

SONATSOFTW

$ 1.8B

* 1 USD = INR 83.04 # Annualized ** as on 29th Sep 23

What’s working well for us…

Large Deals

Quant M&A

Modernization

Verticals / Partnerships

SITL

10 Large deals won YTD

Integrated with Sonata systems

Cloud & Data pipeline is 38%

Retail/Mfg., BFSI, HLS, TMT) and (MS, AWS)

Steady GC growth

Large Deals: 35 large deals under pursuit. 38% of Large deals pipeline are with Fortune500 clients

60% of Top 10 Accounts are Fortune 2000 Companies vis-à-vis 30% in previous year

Key Large Deal Wins

Client - Premier 3rd party logistics $12.6M over 3 Years

Logistics application hosted on Azure

Client - Communication & Managed Network $6.5M over 7 years

Business Services: F&O, Implementation of D365

Client - Outsourced industrial Steel service $5.7M over 6 years

Build Next Gen Trading platform

Large Deals in the pipeline

RMD = 11 deals

TMT = 7 deals

BFSI = 7 deals

HLS = 6 deals

Emerging = 4 deals

Quality of growth – Top 10 clients movement

Q1 FY 23

Q2 FY 24

Logos in Pipeline

Fortune 50

Fortune 500

2 clients

3 clients

4 clients

5 clients

10 clients

Large Deal Win - Logistics application hosted on Azure ($12.6 M)

Client Overview Premier Third-Party Logistics company that provides creative supply chain solutions with an asset-lite transportation and distribution services

Industry Logistics

Areas in Scope

IT Services to build and maintain Creative Logistics Solutions and Strategic IT service Partner

Client Overview

Client HQ USA

Transportation, Distribution & Warehousing

Data Analytics, Architecture, Engineering and DBA

Volume >400K Omnichannel shipment/month

Infrastructure and Network Operations

Integration and EDI

Application Development & Maintenance

Large Deal Win – Business Services: F&O, Implementation of D 365 ($6.4 M)

Client Overview Client provides high-bandwidth connectivity and global managed network services including managed ICT, cyber security, and UCaaS solutions, to a range of blue-chip customers inclusive of Hyperscalers, telecommunications operators, new media providers and enterprises throughout the world.

Industry Telecom

Client Overview

Client HQ UK

Locations North America, Europe & Asia

Areas in Scope

Gen AI, Cloud and Connected Data led Finance Transformation. Sonata shall run the finance operations for next 5 years and transfer of 42 employees from Client to Sonata,

Finance Transformation

ERP Modernisation

Data Platform

Integrated Billing Platform

Cloud, AI, RPA

Key bets for the future ….

Microsoft Fabric

AI & Gen AI

Joint GTM

Pipeline created across 70+ customers

Harmony.AI launched; Pipeline created across 50+ customers

MS GTM funding- first tranche received; AWS – Rescale Program

Verticalization

Focused GTM

Large Deals

Mega accounts

Continued focus

Sonata’s Responsible-first AI offering for Enterprise scale – Harmoni.AI Geared towards building an AI first culture

30 Internal Cases

Harmoni.AI Platform for Responsible AI

Active Conversations at 50+ accounts

Offerings and methodology published

Harmoni.AI

Core team built; training created

All functions identifying & implementing Gen AI

Blackbelt club

35% of talent GenAI trained team members

Our GTM’s are aligned with our Partners and our investment focus…

Cloud Apps Modernization

Data & Analytics

Microsoft Business Apps

Service Experience Transformation

Hyper Automation

Managed Services

MSFT Market Place Partners

Microsoft-Sonata Partnership: 30+ Years of jointly driving Customer Success

Sonata named again in Inner Circle for Microsoft Business Application 2023-24

AI/Gen-AI Industry Partnership

400+ Clients Across The Globe USA, Europe, Asia, India, Australia, Middle East

$650+ Million Per Annum Revenue To Microsoft

Partner for RPA Migration 100

Partner for Microsoft Fabric

2500+ Team On Microsoft Technologies

Microsoft Cloud Solution Partner - Asure Expert MSP Competencies. 10 Advanced Specialisation in Dynamics 365, Data Analytics, Teams, CAF, M365, Asure

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 Healthcare, Retail, Sustainability, Manufacturing

Industry Digital Transformation Retail, CPG, Manufacturing, Telecom, Healthcare, Hi-tech, BFSI

Success Stories (1/2)…Unified Digital Solution for Business Process Transformation

Client Overview

Industry Manufacturing

Employees > 6000

Leading Sustainable Belting Solution Company

The Pressure Points

Solutions

Results

•

Standardization and optimization of core manufacturing processes

Need more transparency

Continuity risks - in the scattered IT landscape

Digital innovation - growth and mergers and acquisitions.

•

Unified and efficient digital solution with implementation of D365 F&O

Automated highly complex 1 Dimension Cut production process

Development of Dynamic Bill of Material calculation to address the configurable order

• Optimized inventory &

consumption - better yields and reduced scraps

• Achieved Business process

standardization & optimization

•

Improvement in average response time to customer queries on pricing, discounts, shipping schedules

Success Stories (2/2)…AI enabled FinOps Transformation

Client Overview

Industry Telecom

Employees > 1600

Leading secure global network services provider

The Pressure Points

Solutions

Results

• Manual FinOps processes - high costs and insufficient access

•

Lack of Integration between upstream / downstream systems. Inventory accuracy issues

• Manual Revenue assurance process

• Most reports from the system are not in a “ready to consume” state

• Devised strategic roadmap to

modernization process.

• Automation and reducing cycle time

from days to hours

• Integration of all applications -

complete automation to enable Single source of Truth

• Modernizing current legacy platform and processes by upgrading to the latest Dynamics platform.

• Near Real time reporting and NextGen

predictive analytics reporting

• Democratization and Self-Service

Reporting Capability

•

Seamless Integration across the Ecosystem with enhanced Data security & compliance

Key Recognition

People – Strength Of Sonata

Financial Management

High Revenue growth with Industry Leading margins

Strong Cash Position & Balance Sheet

Superlative returns for Shareholders

Sound Capital Allocation

Focus on high revenue rate realization and high margins business

Very strong positive cash generation and cash position

Industry leading ROCE and ROE & Bonus share issue

Sound capital allocation

EPS : ₹34.30* / Share

Cash and equivalents ₹690+Crs

ROCE : 33.8%*

FY24 Interim Dividend : ₹7 / share

*Trailing 12 months

Consistent Growth Over Last 10 years

Consolidated Revenue & profitability ($Mn)

Revenue

EBITDA*

PAT

926

745

570

528

436

354

381

254

270

288

FY 14 FY 15 FY 16 FY 17 FY 18 FY 19 FY 20 FY 21 FY 22 FY 23

CAGR 15%

CAGR 18%

Predictable and resilient growth trajectory

*Before OI and FX

Financial Performance Of International Services – Q2 FY24 Industry leading QoQ growth in Revenue and EBIDTA; Process improvements result in Collection rigour

$77.3

$80.9

$57.8

4.6% QoQ

40.0% YoY

Constant Currency

1.24

5.2% QoQ

38.5% YoY

Q2 FY23

Q1 FY24

Q2 FY24

Revenue

Book to bill

39.2%

38.3%

36.1%

33.6%

38.2%

37.6%

34.4%

34.3%

33.8% without Acq. Loan

30.0%

32.0%

n M $ n

e u n e v e R

l a t i p a C n o n r u t e R

$20.0 n M $15.0 $ n

T A $10.0 P &

A $5.0 D T I B $- E

48 O S 47 D

14.8% QoQ

28.8% YoY

5.0% QoQ

2.2% YoY

$14.5

$9.9

$16.3

$18.7

$9.7

$10.1

Q2 FY23

Q1 FY24

Q2 FY24

EBITDA excl OI & Fx

PAT

FY 20

FY 21

FY 22

FY 23

YTD_Q2 FY24

Q2 23

Q3 23

Q4 23

Q1 24

Q2 24

ROCE

RONW

* Trailing 12 months

International Business: Revenue Drivers

5 4

Q2 23

Q1 24

Q2 24

1-3 Mn

3-5 Mn

5+ Mn

72%

62%

69%

58%

70%

61%

s r e m o t s u C n o

i l l i

M $ f o

o N

n o i t a r t n e c n o C t n e i l

d e d d a s r e m o t s u C w e N

y h p a r g o e G y b e u n e v e R

Q2 23

Q1 24

Q2 24

25%

19%

56%

20%

16%

64%

17% 15%

69%

Q2 23

Q1 24

Q2 24

Top 10 Customer

Top 20 Customer

Q2 23

USA

Q1 24

Europe

Q2 24

Rest of World

International Business: Operational Performance

Utilization

Headcount by Function

84.2%

82.7%

82.0%

Q2 23

Q1 24

Q2 24

6,267

361 109

6,092

371

111

5,797

5,610

6,500

6,000

5,500

5,000

4,500

4,000

3,500

3,000

5,240

280 98

4,862

Q2 23

Delivery

Q1 24

S&M

Q2 24

G&A

Total

Continued strong utilization

International Business: Revenue by Verticals Mix

Verticals : BFSI & HLS in investment phase; 4.7% QoQ growth

Q1 FY24

Q2 FY 24

Healthcare 14%

TMT 26%

BFSI 18%

Emerging 5%

Revenue Share

Retail and Manufacturing 37%

BFSI 21%

Emerging 5%

Revenue Share

Retail and Manufacturing 36%

Healthcare 11%

TMT 27%

International Business: Revenue by Top GTMs

Cloud and Data continuous to be more than 50%

Q1 FY 24

Q2 FY 24

Emerging Tech 10%

Others 6%

Revenue Share

Cloud 38%

Dynamics 26%

Data 20%

Others 6%

Dynamics 23%

Revenue Share

Cloud 39%

Data 22%

Domestic Business:– Delivering Consistently Strong Growth With Industry Leading ROCE

) s r c R N

I ( e u n e v e R

t n u o C d a e H

Cloud ~78.9% Annuity ~75.9%

1,392

19.5% YoY

1,244

1,041

Q2 23

Q1 24

Q2 24

) s r c R N

I (

A D T I B E &

n o i t u b i r t n o C s s o r G

EBITDA 19.7% YoY

GC 16.7% YoY

Q2 23

Q1 24

Q2 24

Q2 23

Q1 24

Q2 24

EBITDA

371

114

399

402

127

128

230

241

238

Q2 23

Q1 24

Q2 24

Delivery

S&M G&A

Total

47.2%

47.3%

E C O R

32.2%

35.5%

28.2%

1.04

0.99

0.72

Q2 23

Q1 24

Q2 24

1.1 0

1.0 0

0.9 0

0.8 0

0.7 0

0.6 0

0.5 0

0.4 0

0.3 0

n o i t u b i r t n o C s s o r G ÷

l a t i p a C g n i k r o w

t e N

O S D

FY 20

FY 21

FY 22

FY 23

YTD_Q2 FY 24

Q2 23

Q3 23

Q4 23

Q1 24

Q2 24

The fastest growing firm in IT Services in the next 3-4 years

Thank You

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Sonata Software Limited has informed the Exchange about Investor Presentation

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