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Sonata SoftwareBOM:532221 -0.24%94 Gross Margin % is 14.78% as of Mar. 2026, which is 12% below its 10-year median of 16.73. GuruFocus rates BOM:532221 with a GF Score™ of 94/100 and a GF Value™ of ₹695.56 (Significantly Undervalued). The stock has 4 warning signs investors should review. Among 2,684 Software companies, Sonata Software ranks worse than 89.16% on this metric.
Warren Buffett believes that firms with excellent long term economics tend to have consistently higher margins.
Durable competitive advantage creates a high Gross Margin % because of the freedom to price in excess of cost. Companies can be categorized by their Gross Margin %
1. Greater than 40% = Durable competitive advantage
2. Less than 40% = Competition eroding margins
3. Less than 20% = no sustainable competitive advantage
Consistency of Gross Margin is key
Sonata Software had a gross margin of 14.78% for the quarter that ended in Mar. 2026 => No sustainable competitive advantage
Be Aware
If a company loses its competitive advantages, usually its gross margin declines well before its sales declines. Watching Gross Margin % and Operating Margin % closely helps avoid value trap situations.
Sonata Software Gross Margin % Related Terms
Sonata Software Gross Margin % Historical Data
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The historical data trend for Sonata Software's Gross Margin % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
BOM:532221 vs IBM, ACN, FISV: Gross Margin % Comparison
For the Information Technology Services subindustry, Sonata Software's Gross Margin %, along with its competitors' market caps and Gross Margin % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Sonata Software Gross Margin % vs Software Industry
For the Software industry and Technology sector, Sonata Software's Gross Margin % distribution charts can be found below:
* The bar in red indicates where Sonata Software's Gross Margin % falls into.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
A positive Gross Profit is only the first step for a company to make a net profit. The gross profit needs to be big enough to also cover related labor, equipment, rental, marketing/advertising, research and development and a lot of other costs in selling the products.
Sonata Software (BOM:532221) has a Gross Margin % of 14.78% as of Mar. 2026. Gross margin is the ratio of total gross profit to net sales. View historical data on Sonata Software and its competitors. This is 12% below median its historical median of 16.73. Over the past decade, Sonata Software's Gross Margin % has ranged from 12.53 to 21.83. According to the industry distribution chart, Sonata Software ranks #2393 out of 2684 companies in the Software industry, placing it in the top 89.2%.
Is Sonata Software's Gross Margin % too high?
Sonata Software's current Gross Margin % of 14.78% is 12% below median its 10-year median of 16.73. Over the past 10 years, this metric has ranged from a low of 12.53 to a high of 21.83. The Software industry median Gross Margin % is 40.47. Sonata Software's value of 14.78% is 63.5% below this industry median. Based on the distribution chart, Sonata Software ranks #2393 out of 2684 companies in the Software industry, which is in the bottom quartile relative to peers. Overall, Sonata Software has a GF Score™ of 94/100 and is considered Significantly Undervalued, reflecting its overall financial health beyond just this single metric.
How does Sonata Software's Gross Margin % compare to IBM and ACN?
According to the Software industry distribution chart, Sonata Software ranks #2393 out of 2684 companies for Gross Margin %. This places Sonata Software in the lower half of its industry. The industry median Gross Margin % is 40.47. Sonata Software's value of 14.78% is 63.5% below this benchmark. Historically, Sonata Software's own Gross Margin % has ranged from 12.53 to 21.83 over the past decade. While the company's 10-year median is 16.73 vs. the industry median of 40.47, Sonata Software has consistently been below the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Gross Margin % for a Software company?
The median Gross Margin % among Software companies is 40.47, based on 2,684 companies in the industry. Companies in the top quartile (top 25%) have a Gross Margin % significantly above this median, while those in the bottom quartile fall well below. However, Gross Margin % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Sonata Software's current Gross Margin % of 14.78% is 63.5% below the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Gross Margin % mean?
A high Gross Margin % can signal that a stock is expensive relative to its fundamentals. Gross margin is the ratio of total gross profit to net sales. View historical data on Sonata Software and its competitors. For the Software industry, the median Gross Margin % is 40.47 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Sonata Software's current Gross Margin % is 14.78%, which is 12% below median its own 10-year median of 16.73. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Sonata Software stock overvalued right now?
Based on GuruFocus' analysis, Sonata Software (BOM:532221) is currently considered Significantly Undervalued. The stock's GF Value™ is ₹695.56, compared to a current price of ₹307.35 — trading 55.8% below its estimated fair value. The current Gross Margin % is 14.78%, which is 12% below median its 10-year median of 16.73 and 63.5% below the Software industry median of 40.47. Sonata Software's overall GF Score™ is 94/100 with 4 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Gross Margin % calculated?
Gross Margin % is calculated from a company's financial statements. For Sonata Software (BOM:532221), the current Gross Margin % is 14.78% as of Mar. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Sonata Software (BOM:532221) Overvalued in 2026?
Based on GuruFocus' analysis, Sonata Software stock appears to be undervalued.
The current stock price of ₹307.35 is trading 55.8% below its estimated GF Value™ of ₹695.56.
GuruFocus considers Sonata Software to be Significantly Undervalued.
Key valuation signals for BOM:532221:
Gross Margin %: 14.78% (12% below median its 10-year median of 16.73)
GF Value™: ₹695.56 vs. price of ₹307.35 (55.8% below fair value)
Industry Position: 63.5% below the Software median (#2393 of 2684)
No single metric tells the full story. See the BOM:532221 stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Sonata Software Ltd is a technology company. The company is engaged in the business of software development, technical services, and product marketing. The company's geographical segments include India and Other than India. It generates maximum revenue from India. The company serves ISVs (Independent Software Vendors); Travel and Tourism; Retail; BFSI; and other industries. Its solution portfolio includes SAP Modernization, Application Management, Managed Cloud Services, Technology Consulting, and other technology-related products and services.
94GF Score
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