College Name - New Delhi Institute Of Management

Company Name – Sonata Software

Student name – Siddharth Rao
Section – MC, DM
Roll no. – 21331
Contact no. - 9810557485

Overview of the industry –

COMPETITORS OF COMPANY
COFORGE LTD
CYIENT LTD
HEXAWARE TECHNOLOGIES LTD
INTELLECT DESIGN ARENA LTD
KPIT TECHNOLOGIES LTD
L&T TECHNOLOGY SERVICES LTD

Scope and Impact of industry on Indian

Economy
The software industry consists of three
main sectors, programming services,
enterprises software products, and shrink-
wrapped software products. As the
technological opportunities came into big
numbers and the scope for business
environment to flourish, these three
sectors became established. Software
industry expanded from its small scale
operations in 1960s and it has been the
major source of creating vast number of
employment and one of the highest
contributors to the economy The software
industry has come of age and matured in
business models. It has gained through
operational performance rather than just
technology innovations or mergers and
acquisitions. In collecting great revenues,
organic development has been one of the
key factors to drive software industry to
such heights.
US alone accounts for 42.6% of the global
software market's value. Between 1988
and 2010, 41,136 mergers and
acquisitions were announced to a total
value of US $1,451 billion. The highest
number and value of deals was set in 2000
during the dot-com bubble (also known as
internet sector’s rapid growth) with 6,757
transactions valued at $447 billion.
According to MarketLine the market
growth is expected to exceed 6% between
the year 2012-2015, bringing the market
close to almost $357 billion. Home use
and general business applications lead the
market at almost $64 billion, according to
a quarter of the overall market that
encompasses systems and application
software.
India's IT & ITeS industry grew to US$ 181
billion in 2018-19. Exports from the
industry increased to US$ 137 billion in
FY20 while domestic revenues (including
hardware) advanced to US$ 44 billion.
Export revenue from digital segment
forms about 20% of the industry's total
export revenue. India's IT industry
contributed around 7.7% to the country's
GDP and is expected to contribute 10% of
India's GDP by 2025. The export sector
crossed US$ 137 billion of revenues and
marginally grew at the rate of 7-9% in
FY20.

Company background –
Sonata Software Limited is a Global IT
Services company, that provides services
in business intelligence and analytics,
application development management
(ADM), mobility, cloud, social media,
testing, enterprise services (ERP and
CRM), and infrastructure management
services. It is headquartered in Bangalore,
India.
Founded in 1986 as the IT division of
Indian Organic Chemicals, the company
spun off as an independent entity in 1994.
The company became a public company in
1998. In 2001, the company obtained SEI-
CMMI Level 5 certification and in the
following years, set up offices in the US,
Europe and Asia Pacific.
Awards and recognition
Sonata Software was awarded as 2016
Microsoft Country Partner of the Year for
India.[12]
Sonata Software was certified PCI DSS for
its payment operation.
GLOBAL OFFICES
Asia-Pacific
Singapore
America
USA: Fremont; Atlanta; Princeton; Newton
; Redmond; Schaumburg
Europe
Germany: Frankfurt, Hanover
UK: Middlesex, Cheshire
Netherlands: Amsterdam
Middle-East
UAE: Dubai
Qatar: Qatar

SONATA SOFTWARE - COMPANY INFO

Chairman & Independent
Director :Pradip P Shah
Director : S B Ghia
Director : Viren Raheja
Managing Director & CEO : P Srikar
Reddy
Independent Director : Radhika Rajan
Company Secretary : Mangal Kulkarni
Addtnl Independent Director : Sanjay K
Asher
AUDITOR : Deloitte Haskins & Sells LLP
IND NAME : Computers - Software -
Medium / Small
HOUSE NAME : Indian Private
Registered office
208 T V Industrial Estate, S K Ahire Marg
Worli,Mumbai,Maharashtra-400030 Ph:
91-22-24943055
E-mail: info@sonata-software.com
URL: http://www.sonata-software.com

CBR(FINANCE)

SONATA SOFTWARE
a)TRANSACTIONAL ANALYSIS –
Sonata Software is a
global IT services company which has formally
launched its new digital business transformation
offering ‘Platformation’. This offering is designed and
built with the primary focus on enabling businesses
and organisations to adopt technology backed new
business models and drive digital transformation.

The ‘Platformation’ offering

Sonata’s ‘Platformation’ offering is a digital IP based

technology led proprietary framework that takes into
account some 16 key parameters that would enable
businesses and enterprises to create technology
platform based new digital business models. Its a
cloud based offering agonistic of cloud service
providers.

‘Platformation’ has three variants – first is Sonata-

Ready, which is company’s own IP based end-to-end
solution with fast implementations and proven
processes for businesses and customers.
Second is Sonata Accelerate, where company deploys
and manages the platforms from technology partners
like Microsoft and SAP for customers and businesses
that already have initiated some level of business
transformation initiatives.

And third is Sonata Custom - a completely custom-

built solution based on either company’s own
platforms, which customers can white label it or
source code the license and build on top to it.

Compared to the first and second option, which are

based on a linear model of licensing, Reddy explained
that the third one is where the customer will able to
know the cost on licensing, running the platform and
also can use it as per own requirements.

INDUSTRIES
Sonata Software deals in these specific industries :-
1)Retail
2)Distribution and Manufacturing
3)Travel
4)ISV
5)Service Industries
 PLATFORMATION SERVICES

1) Platformation Business Consulting

2) Data & Analytics
3) Microsoft Dynamics
4) Cloud Transformation
5) Advanced Technologies
6) Customer Engagement & Commerce
7) Digital Assurance & Managed Services
8) Platform Engineering Services

BUSINESS PERFORMANCE

The Company is primarily engaged in the business

of delivering IT services and software solutions to
its customers across the globe including the US,
Europe, Middle-East, Asia - Pacific, Australia and
New Zealand. Besides, the Company also
distributes and re-sells products from global
technology companies present in India. During the
Financial Year, the company continued to focus
on Platformation™ led solutions for its customers
across its focus verticals of Retail, Travel,
Distribution and ISVs. This has enabled
the Company to continue to demonstrate steady
growth in both revenues as well as margins.
Revenues of the Company grew 27% over the
previous year, and PAT was 11% higher than
previous year.
  Revenues –
Revenue 2020 2019
1) Revenue from 255,176 188,529
hardware/software
product and
licenses
2) Revenue from 118,753 107,325
software services
3) Other operating 397 236
revenues
total 374,326 296090

b) CAGR

Compound annual growth rate (CAGR) is a metric

that smoothes annual gains in revenue, returns,
customers, etc., over a specified number of years as
if the growth had happened steadily each year over
that time period.

CAGR on sales =
CAGR =(Ending balance/beginning balance)1/n - 1
 Here,

 Ending balance is the value of the investment at

the end of the investment period
 Beginning balance is the value of the
investment at the beginning of the investment
period
 N is the number of years you have invested

CAGR on sales of sonata software

Key FY20 FY19 FY18 FY17 FY16

financi
als
Net 3,74,3 2,96,0 2,45,3 2,37,0 1,94,0
sales 26 90 94 38 50

In fy17 it had cagr of 22.17 %

in fy18 it had cagr of 3.50 %
in fy19 it had cagr of 20.65 %
in fy20 it had cagr of 28.39 %

CAGR ON PROFIT
Key FY20 FY19 FY18 FY17 FY16
financials
EBITDA 43,121 36,286 27,643 23,866 23,568

In FY17 it had cagr of 1.2 %

In fy18 it had cagr of 15.82 %
In fy19 it had cagr of 31.26 %
In fy20 it had cagr of 18.83 %

CONSOLIDATED BALANCE SHEET (in lakhs)

DESCRIPTION 31.3.20 31.3.19
Total Income 380166 298815
Total Expenditure 337045 262529
EBITDA 43121 36286

As the total income increased by 81351 the expenses

also increased by 74516,so we can say that the
increase in expenses has hurt the chances for the firm
to earn more.if the expenses can be decreased ,the
firm can earn more.
c)
d) Solvency Ratio – people who have advanced money
to the business are interested in the safety of their
periodic payments of interest as well as repayment of
principal amount at the end of the loan period in order
to determine the ability of business to serve its debt in
the long run solvency ratios are calculated.
1)Debt equity ratio – long term debt/shareholder
funds
= borrowings + loan/ equity share capital
for year 2019 = 1562/17286 = 9 %
for year 2020 = 8600/17345 = 49 %

Comparison with another company –

Ultimate software company – 1.85 %
Pegasystems inc – 97.07 %
Bentley systems – 54.51 %
Industry benchmark – 67.08 %
Interpretation – the ideal debt to equity ratio is 67.08
% so sonata software is doing comparitively good than
pegasystems inc
2)Debt-Capital employed ratio – long term
debt/capital employed ratio or net assets

For year 2020, 8600/25945 =33%

For year 2019, 1562/18848 =8.28%
Comparison with another company –
Ultimate software – 0.01 %
Pegasystems – 0.39 %
Bentley systems – 41.13 %
Industry benchmark – 28 %
Interpretation – the company has been doing good
when it comes to debt to capital employed ratio,other
competitors are also performing well when we look at
the industry benchmark.

3)Propreitory Ratio = shareholder’s funds/total assets

or shareholder’s funds/net assets

Net assets= total fixed asset + net working capital

Net working capital = current assets – current
liabilities
For the Year 2020,
N.W.C = 110378 -8600
=101778
 For the year 2019,
N.W.C = 101692 – 22530
= 79162
Total fixed asset for yr 2020 = 34342
Total fixed asset for yr 2019 = 22530
Net assets(2019) = 22530 + 79162 =101692
Net assets(2020) = 34342 + 101778 =136120
Propreitory ratio (2019) = 17286/101692= 16.99 %
Propreitory ratio (2020) = 17345 / 136120= 12.74 %
Comparison with another company –
Ultimate software – n/a
Pegasystems – n/a
Bentley systems – n/a
Industry benchmark – n/a

4) Capital gearing ratio = fixed cost bearing

funds/variable cost bearing funds

For year 2019 = 1562/ 17286 = 9.03 %

For year 2020 = 8600/17345 = 49 %
Comparison with another company –
Ultimate software – n/a
Pegasystems – n/a
Bentley systems – n/a
Industry benchmark – n/a

5) Interest coverage ratio = EBIT/Interest on long term

loan
Sonata software – 26.00
Comparison with other companies –
Pegasystems – n/a
Bentley systems – n/a
The ultimate software – n/a
Industry benchmark - n/a
Interpretation -

e) liquidity test – are calculated to measure the

short term solvency of business that is firm’s ability
to meet its current obligations.these are analysis by
looking at the amount of current assets & current
liabilities in balance sheet.

1) CR Ratio – current assets/current liabilities

For the year 2019,cr ratio =101962/71362= 1.42 %
For the year 2020,cr ratio = 110378/ 84,003 =1.31 %
Comparison with other companies
Bentley systems – 0.80
Pegasystems – 2.54
Ultimate software group – 1.02
Industry benchmark – 2.5
Interpretation – the industry benchmark is 2.5 so
according to it the company should increase the
investment in the current assets to increase the
current ratio.

2) Liquidity ratio – Current asset –inventories-

prepaid expenses/current liabilities

For the year 2019,liquidity ratio =

101962-549(p.e)/71362= 1.42
For the year 2020,liquidity ratio =110378 –
560/84003 = 1.30

Comparison with other companies

Pegasystems – 1.34
The ultimate software – 1.78
Bentley systems -2.1
Industry benchmark – 2.87
 Interpretation – compared to the industry
benchmark,the company is performing really as any
thing more than 2.87 will be considered bad and
sonata software is well within the boundary limit

f) Profitability Ratio –are the financial performance

which are calculated to analyse the earning capacity
of business which are the outcome of utillization of
resources employed in the business.there is a close
relationship b/w the profit and efficiency with which
resources in the business are utillised.most
commonly ratios used are gross profit
ratio,operating profit ratio,operating ratio,net profit
ratio,return on investment,earning per share,book
value per share,price earning ratio etc.

1)Gross profit ratio – (g.p/sales)*100

Gross profit = revenue from operations – cost of

revenue from operations
For the year 2019, 36286/298815 = 12.14 %
For the year 2020, 43121/380166 = 11.34 %

Comparison with other companies –

 The ultimate software – 61.36 %
Pegasus systems – 68.37%
Bentley systems – 78.47 %
Industry benchmark – 70.69 %
Interpretation – g.p ratio of sonata software is very
low and indicates low and unfavourable purchase
policy.so,the compay should do something to
increase this ratio.they should either cut the cost or
expenses.

2)Operating ratio – (cost of revenue from operations

+operating expenses/net revenue from
operations)*100

Cost of revenue + operating expenses for the year

2020 = 66031 + 3654 + 620 + 1194 + 7 +138 + 647 +
163

=72454

Cost of revenue + operating expenses for the year

2019 = 56886 + 1274 + 624 + 3342 + 33 + 148 + 658
+ 186
 = 63151
So,operating profit for the year 2020 =
(72454/380166)*100
=19.05 %
So,operating profit for the year 2019 =
(63151/298815)*100
=21.13 %

Comparison with other companies –

Bentley – 22.73%
Pegsus systems – 1.37%
The ultimate software – 5.69 %
Industry benchmark – 12.04 %
Interpretation – as we can see the numerator of
operating profit is less which is a good sign and is
desirable.we can say that the operating profit is all
right

3)Operating profit ratio – (operating profit/revenue

from operations) * 100
Or,
=100 – operating ratio
For the year 2020 = 100-19.05% =80.95 %
For the year 2019 = 100 -21.13% =78.87 %
 Comparison with other companies –
Pegasystems – 98.63 %
Bentley systems – 77.27 %
The ultimate software - 94.31 %
Industry benchmark – 87.96 %
Interpretation – the operating profit ratio of our
company is higher and we should be delighted that
higher percentage is always better.
4) Net profit ratio – (net profit/sales or revenue from
operations)*100
net profit = g.p-indirect expense
indirect expense (2020) = 1194 + 7 + 138 + 647 + 637
+ 4100 + 770 + 3487 + 163 =11143
indirect expense (2019) = 3342 + 33 + 148 +658 +
622 + 4499 + 728 + 2532 + 186 = 12748
net profit for year 2020 = 43,121 –11143 = 31978
net profit for year 2019 = 36286 – 12748 = 25358

net profit ratio (2020)= (31978/380,166)*100 =8.41

%
net profit ratio (2019) = (25358/298,815)*100 = 8.48
%
Comparison with other companies –
Pegasystems – 2.08 %
Bentley systems – 16.66 %
The ultimate software – 4.78 %
Industry benchmark - 6.01 %
Interpretation – the net profit ratio of sonata
software is good and that is why sonata software is
doing comparitively well when we compare it to the
industry benchmark.

5)Return on Capital employed – (PBIT/total cap.

Employed) *100
Total cap employed(2020) = 101778
Total capital employed (2019) = 100130

For the year 2020 =(31978/101778)*100

= 31.41%
For the year 2019 = (25358/100130)*100
=25.32%

Comparison with other companies –

Pegasystems – 2.11 %
Bentley systems – 16.66 %
The ultimate software – 2.4 %
Industry benchmark - 10 %
Interpretation – we can say that the company is
comparitively good and is earning higher returns on
capital employed.

6)Return on shareholder’s funds – profit after

tax/shareholder’s funds

For the year 2020 = 27,693/17345 = 1.59 %

For the year 2019 = 24,926/17286 = 1.44 %

Comparison with other companies –

Pegasystems – 3.65%
Bentley systems – 6.75 %
The ultimate software – 8.39 %
Industry benchmark - 7.8 %
Interpretation – as the return on shareholder’s
funds is not higher than the return on capital
employed,it is not a good sign and the company
should work upon it to correct it.

7)Earning per share – company’s net income/total no.

of outstanding shares

For the year 2020 = 31978/1052

 =30.39
For the year 2019 = 25358/1052
=24.10
Comparison with other companies –
Pegasystems – 37.55 %
Bentley systems – 95.68 %
The ultimate software – 18.58 %
Industry benchmark - 27.52 %
Interpretation –as the earning per share is greater
than the industry benchmark we are optimistic that
we can go ahead and invest in sonata software.

8) Book value per share – equity shareholder’s

funds/no. of outstanding shares

For the year 2020 = 17345/1052 = 16.48 per share

For the year 2019 = 17286/1052 = 16.43 per share
Comparison with other companies –
Pegasystems – 6.72
Bentley systems – 16.82
The ultimate software – 12.70
Industry benchmark - 6.12
 Interpretation – shareholder will be very joyful
about investing in this company as it will giv good
returns

9)Price/Earning per ratio – market price/earning per

share
For the year 2020 = 368/30.69 =11.99

Comparison with other companies –

Pegasystems –n/a
Bentley systems – 78.81
The ultimate software – 183.64
Industry benchmark - 53.43
Interpretation –as the p/e ratio is 11.99 times,it
shows we are paying 11.99 rs for earning 1 ruppee.

g) Cost center –
1) Purchase department
2) Finance department
3) Maintainance department
4) legal department
Profit center –
1) Sales department
2) Pricing department
3) Promotion department
h) Breakeven point –
= F.C & P.V ratio
F.C =employee benefit expense+interest+rent + sales
commission
=66031+1518+1194+770
=69513
Variable cost
=purchase of traded itms + travelling expense+legal
fees
=241579+4100+163
=245842

Breakeven point = f.c/p.v ratio

p.v ratio =contribution/sales
contribution =sales - variable cost
contribution =374,326 – 245842
=128484
Pv ratio = 0.34
Breakeven point = 69513/0.34 = 204450

CBR (social media)

1)Sonata software has 1,396 Followers on twitter.

2)Sonata software has 487 Followers on instagram.
3)The main theme that Sonata software is focusing
on is :-
a)Great work environment
b)Product superiority & uniqueness
c)Sonata platformation
d)Improving business performance
e)Customer feedback
4)Rating of Sonata software :-
a) Global rank – #295930 worldwide
b) Country rank - #16236 india
c) Category rank - #7541 Computer electronics
d) Monthly visit – 71.45 monthly visit in december
alone
e) Bounce Rate - 31.93%
f) Pages per Visit - 10.08
g) Monthly Visits - 71.50K
h) Avg. Visit Duration - 00:09:01
i) Top 5 Countries
Country Share-
India - 88.30%
United States - 7.07%
Canada - 2.11%
United Kingdom - 0.48%
Israel - 0.34%

j) Traffic Sources
Oct 2020 - Dec 2020,Worldwide (Marketing Mix)
Source Traffic Source
Direct - 62.27%
Search - 15.44%
Email - 13.66%
Referrals -7.69%
Social -0.95%
Display Ads - 0.00%
5) The company’s presence is similar on
facebook,twitter & linked in and whenever the
company is posting something on social media, it posts
the same post on every other social media. Reasons of
posting the same thing on every social media platform
could be:-
a) it wants to target audience on every social media
platform.
b)preventing huge difference in posts so that they
don’t seem active on any specific website.
6) The company seems to be moving in the direction of
digitalising every product and their emphasize is on
platformation techonology which is kind of a unique
kind of thing that they are offering.they might
introduce a new innovative product on their website
which will transform the business perhaps in a new
way.
7)In 2017 City based Sonata Software - a global IT
services company has formally launched its new digital
business transformation offering ‘Platformation’ in the
next few months. This offering is designed and built
with the primary focus on enabling businesses and
organisations to adopt technology backed new
business models and drive digital transformation.
“‘Platformation’ is trying to address the key four
dimensions that makes any platform based business
successful, which includes massive scalability, create
partner based ecosystem, open standards and data
driven intelligence,” Sonata Software’s CEO & MD
Srikar Reddy told ETCIO.com during an interaction.
The ‘Platformation’ offering

Sonata’s ‘Platformation’ offering is a digital IP based

technology led proprietary framework that takes into
account some 16 key parameters that would enable
businesses and enterprises to create technology
platform based new digital business models. Its a cloud
based offering agonistic of cloud service providers.

‘Platformation’ has three variants – first is Sonata-

Ready, which is company’s own IP based end-to-end
solution with fast implementations and proven
processes for businesses and customers.

Second is Sonata Accelerate, where company deploys

and manages the platforms from technology partners
like Microsoft and SAP for customers and businesses
that already have initiated some level of business
transformation initiatives.

And third is Sonata Custom - a completely custom-built

solution based on either company’s own platforms,
which customers can white label it or source code the
license and build on top to it.

Compared to the first and second option, which are

based on a linear model of licensing, Reddy explained
that the third one is where the customer will able to
know the cost on licensing, running the platform and
also can use it as per own requirements.

CBR (economics)
Part 1
FACTORS AFFECTING SUPPLY OF THE PRODUCT
1) Price of a Product or Service:
Affects the demand of a product to a large extent. There is an
inverse relationship between the price of a product and
quantity demanded. The demand for a product decreases
with increase in its price, while other factors are constant,
and vice versa.For example, consumers prefer to purchase a
product in a large quantity when the price of the product is
less. The price-demand relationship marks a significant
contribution in oligopolistic market where the success of an
organization depends on the result of price war between the
organization and its competitors.

2) Income:

Constitutes one of the important determinants of demand.

The income of a consumer affects his/her purchasing power,
which, in turn, influences the demand for a product. Increase
in the income of a consumer would automatically increase
the demand for products by him/her, while other factors are
at constant, and vice versa.

For example, if the salary of Mr. X increases, then he may

increase the pocket money of his children and buy luxury
items for his family. This would increase the demand of
different products from a single family. The income-demand
relationship can be analyzed by grouping goods into four
categories, namely, essential consumer goods, inferior goods,
normal goods, and luxury goods.

The relationship between the income of a consumer and

each of these goods is explained as follows:

a. Essential or Basic Consumer Goods:

Refer to goods that are consumed by all the people in the
society. For example, food grains, soaps, oil, cooking fuel, and
clothes. The quantity demanded for basic consumer goods
increases with increase in the income of a consumer, but up
to a fixed limit, while other factors are constant.

b. Normal Goods:

Refer to goods whose demand increases with increase in the

consumer’s income. For example, goods, such as clothing,
vehicles, and food items, are demanded in relatively
increasing quantity with increase in consumer’s income. The
demand for normal goods varies due to .different rate of
increase in consumers’ income.

c. Inferior Goods:

Refer to goods whose demand decreases with increase in the

income of consumers. For example, a consumer would prefer
to purchase wheat and rice instead of millet and cooking gas
instead of kerosene, with increase in his/her income. In such
a case, millet and kerosene are inferior goods for the
consumer.
However, these two goods can be normal goods for people
having lower level of income. Therefore, we can say that
goods are not always inferior or normal; it is the level of
income of consumers and their perception about the need of
goods.

d. Luxury Goods:

Refer to goods whose demand increases with increase in

consumer’s income. Luxury goods are used for the pleasure
and esteem of consumers. For example, expensive jewellery
items, luxury cars, antique paintings and wines, and air
travelling.

3) Tastes and Preferences of Consumers:

Play a major role in influencing the individual and market
demand of a product. The tastes and preferences of
consumers are affected due to various factors, such as life
styles, customs, common habits, and change in fashion,
standard of living, religious values, age, and sex.

A change in any of these factors leads to change in the tastes

and preferences of consumers. Consequently, consumers
reduce the consumption of old products and add new
products for their consumption. For example, if there is
change in fashion, consumers would prefer new and
advanced products over old- fashioned products, provided
differences in prices are proportionate to their income.

Apart from this, demand is also influenced by the habits of

consumers. For instance, most of the South Indians are non-
vegetarian; therefore, the demand for non- vegetarian
products is higher in Southern India. In addition, sex ratio has
a relative impact on the demand for many products.

For instance, if females are large in number as compared to

males in a particular area, then the demand for feminine
products, such as make-up kits and cosmetics, would be high
in that area.

4) Price of Related Goods:

Refer to the fact that the demand for a specific product is
influenced by the price of related goods to a greater extent.

Related goods can be of two types, namely, substitutes and

complementary goods, which are explained as follows:
a. Substitutes:
Refer to goods that satisfy the same need of consumers but
at a different price. For example, tea and coffee, jowar and
bajra, and groundnut oil and sunflower oil are substitute to
each other. The increase in the price of a good results in
increase in the demand of its substitute with low price.
Therefore, consumers usually prefer to purchase a substitute,
if the price of a particular good gets increased.

b. Complementary Goods:
Refer to goods that are consumed simultaneously or in
combination. In other words, complementary goods are
consumed together. For example, pen and ink, car and
petrol, and tea and sugar are used together. Therefore, the
demand for complementary goods changes simultaneously.
The complementary goods are inversely related to each
other. For example, increase in the prices of petrol would
decrease the demand of cars.
5) Expectations of Consumers:

Imply that expectations of consumers about future changes

in the price of a product affect the demand for that product
in the short run. For example, if consumers expect that the
prices of petrol would rise in the next week, then the
demand of petrol would increase in the present.

On the other hand, consumers would delay the purchase of

products whose prices are expected to be decreased in
future, especially in case of non-essential products. Apart
from this, if consumers anticipate an increase in their
income, this would result in increase in demand for certain
products. Moreover, the scarcity of specific products in
future would also lead to increase in their demand in
present.

6) Effect of Advertisements:
Refers to one of the important factors of determining the
demand for a product. Effective advertisements are helpful in
many ways, such as catching the attention of consumers,
informing them about the availability of a product,
demonstrating the features of the product to potential
consumers, and persuading them to purchase the product.
Consumers are highly sensitive about advertisements as
sometimes they get attached to advertisements endorsed by
their favorite celebrities. This results in the increase demand
for a product.

7) Distribution of Income in the Society:

Influences the demand for a product in the market to a large
extent. If income is equally distributed among people in the
society, the demand for products would be higher than in
case of unequal distribution of income. However, the
distribution of income in the society varies widely.

This leads to the high or low consumption of a product by

different segments of the society. For example, the high
income segment of the society would prefer luxury goods,
while the low income segment would prefer necessary
goods. In such a scenario, demand for luxury goods would
increase in the high income segment, whereas demand for
necessity goods would increase in the low income segment.

8) Growth of Population:
Acts as a crucial factor that affect the market demand of a
product. If the number of consumers increases in the market,
the consumption capacity of consumers would also increase.
Therefore, high growth of population would result in the
increase in the demand for different products.

9) Government Policy:
Refers to one of the major factors that affect the demand for
a product. For example, if a product has high tax rate, this
would increase the price of the product. This would result in
the decrease in demand for a product. Similarly, the credit
policies of a country also induce the demand for a product.
For example, if sufficient amount of credit is available to
consumers, this would increase the demand for products.

10) Climatic Conditions:

Affect the demand of a product to a greater extent. For
example, the demand of ice-creams and cold drinks increases
in summer, while tea and coffee are preferred in winter.
Some products have a stronger demand in hilly areas than in
plains. Therefore, individuals demand different products in
different climatic conditions.

IMPACT OF COVID-19 ON BUSINESS - Sonata, like most

businesses globally, had an impact owing to Covid 19 and
subsequent lockdowns and
travel restrictions. We informed Stock exchanges in the
month of March regarding the impact of up to
40% on our profits during the first half of the year owing to
reduction of business from clients in travel
and retail industries.

Part 2

FACTORS AFFECTING SUPPLY OF THE PRODUCT

1) Price:
Refers to the main factor that influences the supply of a
product to a greater extent. Unlike demand, there is a direct
relationship between the price of a product and its supply. If
the price of a product increases, then the supply of the
product also increases and vice versa. Change in supply with
respect to the change in price is termed as the variation in
supply of a product.

Speculation about future price can also affect the supply of a

product. If the price of a product is about to rise in future,
the supply of the product would decrease in the present
market because of the profit expected by a seller in future.
However, the fall in the price of a product in future would
increase the supply of product in the present market.
2) Cost of Production:
Implies that the supply of a product would decrease with
increase in the cost of production and vice versa. The supply
of a product and cost of production are inversely related to
each other. For example, a seller would supply less quantity
of a product in the market, when the cost of production
exceeds the market price of the product.

In such a case the seller would wait for the rise in price in
future. The cost of production rises due to several factors,
such as loss of fertility of land, high wage rates of labor, and
increase in the prices of raw material, transport cost, and tax
rate.

3) Natural Conditions:
Implies that climatic conditions directly affect the supply of
certain products. For example, the supply of agricultural
products increases when monsoon comes on time. However,
the supply of these products decreases at the time of
drought. Some of the crops are climate specific and their
growth purely depends on climatic conditions. For example
Kharif crops are well grown at the time of summer, while
Rabi crops are produce well in winter season.

4) Technology:
Refers to one of the important determinant of supply. A
better and advanced technology increases the production of
a product, which results in the increase in the supply of the
product. For example, the production of fertilizers and good
quality seeds increases the production of crops. This further
increase the supply of food grains in the market.

5) Transport Conditions:
Refer to the fact that better transport facilities increase the
supply of products. Transport is always a constraint to the
supply of products, as the products are not available on time
due to poor transport facilities. Therefore even if the price of
a product increases, the supply would not increase.

In India sellers usually use road transport and the poorly

maintained road makes it difficult to reach the destination on
time the products that are manufactured in one part of the
city need to be spread in the whole country through road
transport This may result in the damage of most of the
products during the journey, which can cause heavy loss for a
seller. In addition the seller can also lose his/her customers
because of the delay in. the delivery of products.

6) Factor Prices and their Availability:

Act as one of the major determinant of supply. The inputs,
such as raw material man, equipment, and machines,
required at the time of production are termed as factors. If
the factors are available in sufficient quantity and at lower
price, then there would be increase in production.

This would increase the supply of a product in the market.

For example, availability of cheap labor and raw material
nearby the manufacturing plant of an organization would
help in reducing the labor and transportation costs.
Consequently, the production and supply of the product
would increase.

7) Government’s Policies:
Implies that the different policies of government, such as
fiscal policy and industrial policy, has a greater impact on the
supply of a product. For example, increase in tax on excise
duties would decrease the supply of a product. On the other
hand, if the tax rate is low, then the supply of a product
would increase.

8) Prices of Related Goods:

Refer to fact that the prices of substitutes and
complementary goods also affect the supply of a product. For
example, if the price of wheat increases, then farmers would
tend to grow more wheat than nee. This would decrease the
supply of rice in the market.

EFFECT OF COVID-19 ON SUPPLY OF THE COMPANY

Since Mid-March, we closed all our offices and moved our

operations to work from home. We changed
systems and processes to enable a smooth transition. We are
happy that 100% of our teams were able
to work from home with same or increased productivity.

Part 3
Profit maximisation - One strategy is to ignore market share
and try to work out the price for profit maximisation. In
theory, this occurs at a price where MR=MC. In practice, it
can be difficult to work this out precisely.

Sales maximisation - Aiming to maximise sales whilst making

normal profit. This involves selling at a price equal to average
cost.

Gaining Market Share - Some firms may have a target to

increase market share, this could involve setting prices as low
as they can afford, leading to a price war. A similar concept to
sales maximisation
Limit pricing - This occurs when a monopoly set price lower
than profit maximisation to discourage entry. This enables
the firm to make supernormal profit, but the price is still low
enough to deter new firms to enter the market.

Predatory pricing - Selling price below cost to try and force

rival out of business. Predatory pricing is illegal. Predatory
pricing can be made easier through cross Subsidisation. This
occurs when a big multinational may use profits in one area
to subsidise a price war in another. The cross subsidisation
enables a firm to sell a product very competitively (or even at
a loss) to try and force the rival firms out of business.

Pricing strategies to help determine the price

Average cost pricing - When a firm sets the price equal to

average cost plus a certain profit margin.

Market-based pricing - When firms set a price depending on

supply and demand. For example, if football clubs, used
market-based pricing, clubs like Manchester United would
probably increase the ticket price – because, at the moment,
all tickets are sold out – suggesting price is below the
equilibrium.

Markup pricing -This involves setting a price equal to

marginal cost of production + x. (where x = the profit margin
a firm wants to make on each sale)

- Setting price and quantity so MR=MC

If demand for your products is highly elastic, cutting prices

should lead to an increase in revenue. Increasing prices will
lead to a fall in revenue.If demand is price inelastic, then you
can increase your profits by increasing your price.

This is the logic behind price discrimination. Firms charge a

higher price to that market segment where demand is more
price inelastic, but a lower price to where demand is more
price elastic.

The optimal pricing strategy will depend on the type of firm.

For example, if you are considered to having a premium
brand – cutting price could be perceived as disastrous as you
lose your brand image, and fail to increase sales. For these
products, it might be better to maintain premium pricing and
optional pricing. For normal goods, with firms looking to
increase market share and gain more market dominance, it is
more important to offer competitive prices, through
strategies such as penetration pricing and even loss leaders.

Part 4
Market structure of software industry : -
Part 5
The cost effective strategy followed by company is
economies of scope as the company is producing variety of
software in various industries :-
a) Commodity trading
b) Manufacturing
c) Retail
d) Services
since working in so many industries, rather than using
different manufacturing components for these software they
are catering single production component and thus taking
benefit of developing variety of products in different
industries and reducing the cost due to production of all
these software at single place.
Part 6
N/A

CBR (Marketing)
a) Product(Solution) portfolio of Sonata Software –
 Brick & Click Retail Platform©
 Modern Distribution Platform©
 Rezopia Digital Travel Platform©
 Kartopia E-commerce Platform©
 Halosys Mobility Platform©
 Commodity CTRM Platform©

b) N/A

c) The computer software is the most successful

product of the company with a sales value of Rs.
809.58 crores in the year 2020

d) COMPETITORS OF COMPANY
 COFORGE LTD
CYIENT LTD
HEXAWARE TECHNOLOGIES LTD
INTELLECT DESIGN ARENA LTD
KPIT TECHNOLOGIES LTD
L&T TECHNOLOGY SERVICES LTD
e) N/A
f) Market Segmentation for Software Companies
There are 4 basic ways to segment your prospects and
customers:

Psychographic Segmentation - Based on personality,

values, opinions, attitudes, interests, and lifestyle.
Job-to-be-done Segmentation - What's the work that
the audience needs to do? How does it impact their
customers?
Demographic Segmentation - How old are your
customers? What is their gender? What is their
Education, Nationality, Religion, or Ethnic Background?
Firmographic Segmentation - What type of industry is
the business in? How big is the company? Where are
they located? How old is the company? What is their
business model?
These four approaches are also the basis for your
customer personas. If you're creating a new product
category, your audience will travel along the so-called
Product (or category) Maturity Cycle.

Following the listed sequence of segmentation

methodology sets you up for successful marketing to
the type of customers that you need as the maturity of
your product evolves.

Segmentation-2

For reference, below is the traditional Technology

Adoption Journey. The chasm represents a
fundamental shift in marketing needs as your audience
will now want to see "proof" of your benefits before
they buy, and they will be deciding based on
pragmatic, usually economic grounds. The innovators
want to "part of your product" and may not even see
themselves as customers, but co-creators of your
solution, or the product category you are establishing.
The early adopters are comfortable taking some risk in
exchange for benefits. The benefits can be economical
but can be more personal in nature as well (status, a
competitive advantage).
g)

technology-adoption-cycle

Using a different approach to market segmentation as

your product category matures is crucial to effectively
reach the right type of "Product Market Fit" at the right
time.
g) Sonata software like most businesses globally, the
company had an impact owing to Covid-19 and
subsequent lockdowns and travel restrictions. The
company suffered a 40% impact on its profits during
the first half of the year owing to a reduction of
business from clients in the travel and retail industries.

“Sonata was able to deliver services for all the existing

contracts fulfil all the obligations. With Innovation and
adaptability from our teams, we were able to work
with our clients to address the changed scenario and
help them in navigating the crisis. Our platformation
and digital services became more relevant to current
situation. This helped to reduce the negative impact on
the bottom line, as evident in our quarterly results,”
company said.

Since Mid-March, the company closed all its offices and

moved operations to work from home smoothly.
Globally all operations are going on unhindered while
work continues to be done from home. The company
will review moving operations to the office premises
based on various factors. But right now it does not see
that as a constraining factor for its business.
They do not see any future negative impact owing to
Covid 19. On the contrary, some of the clients’
business is coming back and seeing uptick. Company
believes that the worst is over, unless Covid-19 takes
dramatic turn with a fresh wave forcing more closures
of countries and businesses

Sonata has adequate capital and financial resources to

meet any exigencies. the cash position net of debt is
Rs399cr as of end of June 2020. the Q1FY21 profit was
Rs49.9cr, 15% decline QoQ. they continue to be
profitable and don’t see major risk to balance sheet
owing Covid 19 unless there is worsening of the
situation that we are not aware of.
h) Sonata software engages with a niche segment
As part of the Business consulting services, they help
incumbent businesses think like a digital native to
achieve their digital transformation mandates. they will
help reimagine the business & leverage the platforms
to create & implement platform business models. By
combining a design thinking led approach with a
platform mindset, they help anchor the platform
journey end-to-end. This combined with industry &
engineering experience, niche horizontal expertise,
platform assets & IPs - they can help companies build
open, connected, intelligent and scalable platforms
which they believe form the core of modern digital
businesses today.

The Business Consulting services leverages world class

consulting assets & best practices – likes of the
Customer Digital Agenda template (CDAT), Platform
Maturity Assessment tool, Digital Business process
library, 16 point tech platform characteristics, etc that
can help you steer the digital agenda, de-risk
enterprise transformation upfront and create
measurable outcomes.
i) As a company owner, you are, by no doubt, very
aware that your client base is the lifeblood of your
overall business. Getting a new customer is
undoubtedly very exciting, and a regular flow of new
customers allows you to expand your business and
fulfill your company vision. However, retaining existing
customers is equally important and not to mention, a
less expensive way to improve your business. So, the
more people hear about or come back for your
products or services, the higher the odds your profit
will increase. With that in mind, let us take a look at
the most effective marketing strategies your business
can employ to achieve a strong client base and growth.
Build an attractive and functional webpage

Most people use the internet nowadays when they

want to find a product or service. So, owning a website
is no longer a question. It is necessary. However, not all
websites are created equal. An original web site with
functional design gets the attention of your customers.
Furthermore, exciting and refreshing content
motivates and engages customers. However, to
maintain customers’ interest, it is also crucial that your
website works well so that each person leaves your site
having a pleasant experience. If your page is interesting
for your audience and meets their needs, then they will
want to come back to explore it more. Most
importantly, they will want to do business with your
company. A site like Practicebloom is a great tool to
grow your business faster and take it further.

Provide excellent customer service

Since your customers are the key to your success, it is
vital to provide them with exceptional customer
service. To implement good customer service, you
need to know what you are selling, inside and out.
Communicate regularly with them through social
media, blogs, or e-news. Be aware of the most
frequent questions customers ask and learn how to
verbalize the answers that will leave them satisfied.
Always be polite and responsive. Make sure you listen
to their requests and handling them courteously and
respectfully. Keep in mind that it is vital to respond
quickly to all inquiries, even if it is only to say you are
looking into the issue and will be back in touch.
Importantly, ask customers what they think of your
business, products, and services. Make sure you
introduce customer ratings on your webpage. Measure
the readiness of your customers to recommend your
company products or services to other people by using
the NPS Survey. This customer rating system can be
used to understand what the customers’ overall
satisfaction with the company’s product or service is,
as well as their loyalty to your brand. Use the feedback
you receive from customers to make it useful in your
customer service process. Take time to regularly
review feedback, identify areas for improvement, and
make specific changes in your business.

Provide exceptional customer service, and you will get

loyal customers for life who are willing to refer your
business to friends, family, and colleagues.

Nurture your loyal customers

Customer retention is not only cost-effective but also a

great branding practice. Your loyal customers are, in a
way, your brand ambassadors. For this reason, you
need to nurture your relationship with them
continuously. Encourage their loyalty by introducing a
customer loyalty program. Rewarding your loyal
customers with benefits like free merchandise,
rewards, coupons, or insider offers like early access to
new products, can keep them coming back. Going the
extra mile and providing benefits that exceed initial
expectations will lead not only to happy customers but
ideally to ones that become your brand promoters (for
free).
Never forget Email marketing

Many business owners have a false idea that email is

no longer a good marketing strategy. Believe us that is
far from the truth. Naturally, you want to stand out
from the competitors, so one way to do it is by offering
more than products or services advertising in your
emails. That said, we’ve chosen three effective email
practices that will bring your business the desired
results.

Use email newsletters to inform your audience of the

latest news, tips, or updates about your product or
company, but also to offer them new and engaging
content. That can include monthly business recaps, e-
books, deals and discounts, images, product videos
how-to, quotes, recent studies, and findings related to
your business, etc. Email newsletters are so diverse
and can come in many different forms- product
promoters, weekly digests of content, quarterly
organization updates, or all in one. Importantly, they
have the goal of keeping subscribers connected,
engaged, and informed about what is new with your
business, but also to drive sales.
Thank you email messages are another great way to
use email marketing. Not only do they show good
manners, but they are an excellent way to build a
healthier long-term customer relationship. By using
them, you are showing gratitude and appreciation to
your customers. Remember, a thank-you email is user-
action based, meaning it is triggered by specific user
action. Typical examples of thank you messages include
thank you for your payment, thank you for purchase,
thank you for registering, thanks for your review, etc.

Attract New Lead

The best business practice for entrepreneurs to grow

their email list is by using cold emails. Cold email is the
practice of contacting someone (via e-mail) who is
unaware of your business. Through this way of
communication, you are usually offering your services
or product, asking them to take a particular action, or
inviting them for coffee or a phone call. Many
entrepreneurs are reluctant to use it (due to its bad
reputation), but keep in mind that when done
effectively, it is the best way to generate leads, build
links, promote content, help you build your network,
and make sales.

Make the most of social media

Social networks are helpful in both landing new

customers and maintaining customer contact after the
initial sale. They offer excellent opportunities to
engage your customers and build trust by showing the
personal side of your business. Keep an eye on your
customers’ opinions, interests, and motives. Make
efforts to change negative thoughts other followers
may have by providing excellent customer service. Bear
in mind that nowadays, customers have turned to
social media platforms to ask questions, register
complaints, and resolve product issues. Take
advantage of this aspect and show that your brand is
listening and cares about what they have to say.
Establish strong partnerships

Teaming up with businesses that offer complementary

services allows you to take advantage of alliances. That
is a very effective way of building a larger client base
and growing your business. Furthermore, focus your
attention on building human relationships. That is an
excellent way to create and secure a client base. The
stronger your relationships are, the more likely your
contacts and customers will be to tell their friends
about you and come back for more.
j) as it is a software company its distribution channel is
through world wide web.

CBR (Organisational behaviour)

a) Mission - Sonata is a global technology
Company, that enables successful
platform based digital transformation
initiatives for enterprises, to create
businesses that are connected, open,
intelligent and scalable. Sonata’s
Platformation™ methodology brings
together industry expertise, platform
technology excellence, design thinking-
led innovation and strategic
engagement models to deliver sustained
long term value to customers. Earlier in
the year Sonata software engaged with
McKinsey to sharpen th Platformation
and scale the approach. they believe
that every client has a unique context in
their digital journey. Given the same,
they created archetypes and
arrowheads to map the client’s digital
journey upfront. they believe that this
positions them uniquely to shape and
fine-tune the Platformation approach
for existing and new clients.
The unprecedented times we are in, the
post-Covid impact will only mandate
customers to accelerate their digital
transformation journey.

Vision -
To become a world-class firm that is a
benchmark for catalyzing business
transformation for our clients, fulfilling
employee aspirations and caring for our
wider community, through depth of
thought leadership, customer centricity
and execution excellence. their thought
leadership in Platformation™ backed by
their choice of strategic investments as
outlined above further demonstrates
the commitment to
becoming a digital partner of choice,
positioning Sonata uniquely in its ability
to offer a unified experience to the
 customers across industry domains,
ensuring they become world-class
digital enterprises.

Organisational Hierarchy –

1) Chairman - Pradip P Shah

2) Ceo - P Srikar Reddy
3) Director – S.B Ghia
4) Director – Viren Raheja
5) Director - Radhika Rajan
6) Director - Sanjay K Asher

b) Average salary of an employee at Sonata

Software is 17.1 lakhs.
Employees at Sonata Software earn an
average of 17.1 lakhs, mostly ranging
from 8.5 lakhs to 33.0 lakhs based on
94 profiles.
For every 100 paid to men, women are
paid 119.
Sonata software has a predominantly
younger workforce. 51% of employees
 lie between 31-36 yrs . 23% of the
employees fall in the age group of 36-41
yrs .
c) N/A

d) Redefining healthcare for the elderly

Sonata Software partnered with EldersIndia

— a platform that tends to the medical needs
of the elderly — to provide care for senior
citizens and parents of our people. We do this
by offering them valuable benefits such as
home healthcare assistance, emergency
services, recreational activities, financial
security, and mobility services. This is one of
the many initiatives that we’ve undertaken to
provide good healthcare and ensure the well-
being of all our people and their families.

The difference Sonata Software has made -

Through our EldersIndia initiative, they have:

  Ensured access to better healthcare
facilities to all our people and their
families
 Extended affordable medical, recreational,
and social services to the elderly
 Assured peace of mind for senior citizens
and also contributed to a healthier,
happier workplace.

e) EMPLOYEE STOCK OPTION PLAN "ESOP"

The Company has an Employee Stock Option

Plan 2013 (Plan) in accordance with the
SEBI(Share Based Employee Benefits)
Regulations 2014. The principal objectives of
this Planare to:

• Attract retain and motivate talented and

critical Employees;

• Encourage Employees to align individual

performance with the Group's objectives;
• Reward Employee performance with
ownership in proportion to their
contribution;and

• Align Employee interest with those of the

Group.

Mr Prasanna Oke Ex-CFO was granted Options

to purchase equivalent shares under the Plan
had during the Financial Year under review
exercised 30000 Options of your Company at
an Exercise Price of 3165.75 per share which
were vested on him as on 19th May 2019
Further Mr Vikas Gurugunti Ex-Chief
Operating Officer was granted Options top
purchase equivalent shares under the Plan
had during the Financial Year under
reviewexercised 18750 Options of your
Company at an Exercise Price of 3 191.95 per
share whichwere vested on him as on 12th
November 2018.