Mid cap IT stocks have outperformed Nifty IT index in 2021 (on YTD basis), where in Nifty IT has gained 12% YTD, stocks like Wipro, Mindtree, Persistent, Mphasis hit record high last week and stocks like Intellect design, Subex have gained >100% YTD, Sonata software is up 67% YTD. To understand the outlook on Mid-Cap IT stocks ET NOW caught up with the management of Sonata Software and Subex.
Subex stock has soared from Rs 7/share to Rs 67/share in a year and has gained over 100% in 2021. This small cap IT stock has a market cap of Rs 3200 cr and has returned to profitability in FY21.
Vinod Kumar, MD & CEO, Subex said the company will be launching HyperSense in FY22. HyperSense will be a game changer for both customers as well as Subex. HyperSense will enable enterprises to adopt Artificial Intelligence (AI) faster, it (HyperSense) marks the start of the company’s platform journey. Growth has been in single digits in the last 2-3 years, from this year onwards we will see growth in double digit with the launch of HyperSense.
Kumar said the company saw modest growth last year and has returned to profits. The business comprises of core portfolio and new age business (like IoT, others) and they are now moving from license based model to subscription based model. Expect the new portfolio will contribute to sizable part of revenues going ahead and core portfolio will grow at higher than industry.
Jagannathan Chakravarthi, CFO, Sonata Software, said, “Microsoft has multiple partners, we (Sonata Software) are 360 degree partners for Microsoft…Microsoft is focusing on implementing platform based services, we are strongly present in this area and we will be able to capture opportunities where Microsoft is present…seeing very strong traction in US, Europe where MS is present…see good traction in growth, we will maintain margins and we see big opportunity in the coming 3-5 years.”
Chakravarthi said, Platformation will help digital transformation of customer. The company is seeing lot of momentum in US, Australia and traction in Europe (after lockdown has been lifted). Post Covid there is big opportunity in digital and the company is completely focused on digital, there is strong demand for migration to cloud and data analytics.
