Sonata Software reported its financial results for the quarter ended June 2026, with net profit declining on a sequential basis even as the company posted strong revenue growth.

Profit fell 17.2% sequentially, according to the report, despite a 29.3% rise in revenue during the same period. On a year-over-year basis, profit slipped approximately 1% while revenue grew by more than 10%. The divergence between robust top-line expansion and contracting profitability underscores a margin compression trend that has affected mid-tier Indian IT services firms as they scale delivery capabilities and absorb cost pressures.

Rising costs and weaker operating margins limited earnings growth during the quarter, the company noted. Margin contraction during periods of aggressive revenue growth is a pattern seen across the IT services sector, where wage inflation, hiring, and investments in new technology capabilities can temporarily weigh on profitability.

Sonata Software also declared an interim dividend of ₹1.25 per share.

Sonata Software is an India-based IT services and technology solutions provider, headquartered in Bangalore. The company is listed on Indian stock exchanges and provides digital transformation, cloud, and enterprise application services to clients across multiple geographies. The company's results come amid a broader earnings season for Indian IT firms, where investors are watching the balance between revenue growth acceleration and margin stability as a key indicator of operational efficiency.

Source: CNBC-TV18 Markets