India, Sept. 15 -- Indian IT stocks are typically valued on the combination of growth, margins and return on capital. Sonata Software presents an unusual mix: its return ratios remain healthy and its AI opportunity is expanding, but earnings growth has not yet reflected the scale of its strategic investments.

Sonata Software is currently trading at around Rs280 per share, giving it a market capitalization of approximately Rs7,846 crore. At about 15x P/E, the stock trades at a discount to the industry multiple of 20x. The stock is trading 38% below its 52-week high of Rs422, making the valuation gap particularly relevant for investors assessing the potential earnings recovery.

Revenue Has Expanded, But Earnings Remain Flat Sonata Softwa...