Sonata SoftwareBOM:532221 +0.88%89 Operating Margin % is 7.23% as of Mar. 2026, which is 10% below its 10-year median of 8.06. GuruFocus rates BOM:532221 with a GF Score™ of 89/100 and a GF Value™ of ₹695.93 (Significantly Undervalued). The stock has 4 warning signs investors should review. Among 2,810 Software companies, Sonata Software ranks better than 56.51% on this metric.
Just like Gross Margin %, it is important to see a company maintains its operating margin over time. Among the same industry, a company with higher operating margin is more efficient in its operation. It is also more stable during industry slowdown or recessions. Peter Lynch prefers those with higher margins than those with lower margins.
Be Aware
Operating Margin % can be manipulated by adjusting the rate of depreciation, depletion and amortization (DDA).
If a company is facing competition, its Operating Margin % may decline. Often the Operating Margin % declines well before the company's Revenue or even profit decline. Therefore, Operating Margin % is a very important indicator of whether the company is facing problems.
For instance, by 2012, Nokia (NOK)'s problems were well known and its stock had lost more than 90% of its market value since 2007. But Nokias Operating Margin % had already been in decline since 2002, although its Earnings per Share (Diluted) were still rising. Investors who paid attention to Operating Margin % would have avoided this huge loss. The same can be said for Research-in-Motion (RIMM).
Therefore, Operating Margin % is a very important screening filter for GuruFocus. GuruFocus's Buffett-Munger screener requires that the profit margin is either consistent or expanding. The Model Portfolio of the Buffett-Munger screener has outperformed the market every year since inception in 2009.
Sonata Software Operating Margin % Related Terms
Sonata Software Operating Margin % Historical Data
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The historical data trend for Sonata Software's Operating 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: Operating Margin % Comparison
For the Information Technology Services subindustry, Sonata Software's Operating Margin %, along with its competitors' market caps and Operating 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 Operating Margin % vs Software Industry
For the Software industry and Technology sector, Sonata Software's Operating Margin % distribution charts can be found below:
* The bar in red indicates where Sonata Software's Operating Margin % falls into.
Operating Margin % - also known as operating income margin, operating profit margin and return on sales (ROS) - is the ratio of Operating Income divided by net sales or Revenue, usually presented in percent.
Sonata Software's Operating Margin % for the fiscal year that ended in Mar. 2026 is calculated as
* 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.
Sonata Software (BOM:532221) has a Operating Margin % of 7.23% as of Mar. 2026. Operating margin is the ratio of total operating income to net sales. View historical data on Sonata Software and its competitors. This is 10% below median its historical median of 8.06. Over the past decade, Sonata Software's Operating Margin % has ranged from 5.59 to 11.17. According to the industry distribution chart, Sonata Software ranks #1222 out of 2810 companies in the Software industry, placing it in the top 43.5%.
Is Sonata Software's Operating Margin % too high?
Sonata Software's current Operating Margin % of 7.23% is 10% below median its 10-year median of 8.06. Over the past 10 years, this metric has ranged from a low of 5.59 to a high of 11.17. The Software industry median Operating Margin % is 3.89. Sonata Software's value of 7.23% is 86.1% above this industry median. Based on the distribution chart, Sonata Software ranks #1222 out of 2810 companies in the Software industry, which is above the industry midpoint. Overall, Sonata Software has a GF Score™ of 89/100 and is considered Significantly Undervalued, reflecting its overall financial health beyond just this single metric.
How does Sonata Software's Operating Margin % compare to IBM and ACN?
According to the Software industry distribution chart, Sonata Software ranks #1222 out of 2810 companies for Operating Margin %. This puts Sonata Software in the upper half of its industry. The industry median Operating Margin % is 3.89. Sonata Software's value of 7.23% is 86.1% above this benchmark. Historically, Sonata Software's own Operating Margin % has ranged from 5.59 to 11.17 over the past decade. While the company's 10-year median is 8.06 vs. the industry median of 3.89, Sonata Software has consistently been above 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 Operating Margin % for a Software company?
The median Operating Margin % among Software companies is 3.89, based on 2,810 companies in the industry. Companies in the top quartile (top 25%) have a Operating Margin % significantly above this median, while those in the bottom quartile fall well below. However, Operating Margin % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Sonata Software's current Operating Margin % of 7.23% is 86.1% above 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 Operating Margin % mean?
A high Operating Margin % can signal that a stock is expensive relative to its fundamentals. Operating margin is the ratio of total operating income to net sales. View historical data on Sonata Software and its competitors. For the Software industry, the median Operating Margin % is 3.89 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Sonata Software's current Operating Margin % is 7.23%, which is 10% below median its own 10-year median of 8.06. 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 ₹695.93, compared to a current price of ₹279.90 — trading 59.8% below its estimated fair value. The current Operating Margin % is 7.23%, which is 10% below median its 10-year median of 8.06 and 86.1% above the Software industry median of 3.89. Sonata Software's overall GF Score™ is 89/100 with 4 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Operating Margin % calculated?
Operating Margin % is calculated from a company's financial statements. For Sonata Software (BOM:532221), the current Operating Margin % is 7.23% 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 ₹279.90 is trading 59.8% below its estimated GF Value™ of ₹695.93.
GuruFocus considers Sonata Software to be Significantly Undervalued.
Key valuation signals for BOM:532221:
Operating Margin %: 7.23% (10% below median its 10-year median of 8.06)
GF Value™: ₹695.93 vs. price of ₹279.90 (59.8% below fair value)
Industry Position: 86.1% above the Software median (#1222 of 2810)
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.
89GF Score
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