Recommendation from Specialty NBFC Finance and Software sector

The scrips in this column have been recommended with a 15-day investment horizon in mind and carry high risk. Therefore, investors are advised to take into account their risk appetite before investing, as fundamentals may or may not back the recommendations.

SONATA SOFTWARE LTD 

CMP - ₹1,066.75 
BSE CODE 532221 
Volume 41,342 
Face Value ₹10 
Target ₹1,114 - 1,165 
Stoploss ₹1,020 (CLS) 

Sonata Software Ltd is primarily engaged in the business of providing Information Technology (IT) services and solutions to its various customers in the United States of America, Europe, Middle East, Australia and India. In June 2023, the company reported net sales of ₹2,015.53 crore, marking a significant increase of 13.3 per cent compared to the ₹1,778.86 crore achieved in June 2022. Furthermore, EBITDA for June 2023 reached ₹206.40 crore, demonstrating substantial growth of 29.14 per cent when compared to the ₹159.83 crore recorded in June 2022. In terms of quarterly performance, the company achieved a net profit of ₹120.12 crore in June 2023, reflecting a notable increase of 11.47 per cent from the ₹107.76 crore reported in June 2022. The company’s expectation is to maintain a top quartile performance within the industry, a trend they have consistently upheld for the past 2-3 quarters. They anticipate securing a position among the top 3-4 industry players and sustaining this level of performance. Hence, we recommend BUY 
 

CreditAccess Grameen Ltd 

CMP - ₹1,463.25 
BSE CODE 541770 
Volume 14,866 
Face Value ₹10 
Target ₹1,520 - 1,560 
Stoploss ₹1,402 (CLS) 

The company stands as a prominent microfinance institution, with a primary mission of providing micro-loans to predominantly female customers residing in India's rural hinterlands. It is backed by CreditAccess India B.V., a multinational entity renowned for its expertise in financing micro and small enterprises. Considering the company's quarterly performance, on a consolidated basis it reported a strong growth of 54.03 per cent from ₹759.59 crore registered in Q1FY23, recording total revenue of ₹1,170.03 crore in Q1FY24. It has reported operating profit growth of 79.87 per cent. Compared to the same quarter last year, the net profit for the first quarter of FY24 skyrocketed 151.5 per cent, from ₹138.55 crore to ₹348.46 crore. Accompanied by its record-breaking quarterly profitability, the company also unveiled robust customer growth, with a notable addition of 3.28 lakh clients. Impressively, 47 per cent of this customer influx originated from regions outside of the top three states. Shares have witnessed an impressive surge of over 60 per cent year-to-date. Given the promising outlook, we recommend BUY.