Shares of Sonata Software have surged around 20% this month, and analysts at ICICI Direct see the stock going another 16% up from the current market price.

The Sonata Software Analyst: Analysts at ICICI Securities led by Sameer Pardikar maintained their ‘buy’ rating for the stock with a price target of ₹835. An upside of 18% from the stock’s last closing price of ₹706.30.

The Sonata Software Thesis: The analysts said that the company’s latest acquisition of U.S.-based Quant Systems is in line with its strategy to accelerate IT services growth and strengthen its offering in BFSI and healthcare verticals. The analysts noted that Quant Systems has quadrupled its revenue in the last 2 years and growth going forward is also expected to be strong.

See Also: Microsoft Cloud Deal Brings Infosys Shares Back In Green On Friday

ICICI Direct also sees the company commanding better pricing as “Quant Systems led data analytics, data engineering is already commanding premium billing rates.”

It sees the software company’s margins going up as margins at Quant Systems are better than at Sonata Software. ICICI Direct highlighted that the EBITDA margin for Quant Systems is “healthy i.e., upwards of 30%.”

The analysts noted that the company’s share price tripled in the last five years as they maintained their buy rating for the stock.

Price Action: Sonata Software Shares were up 0.66% to trade at ₹710.95 in the early hours of trading on Monday.

Read Next: ‘Very Bullish’ Mark Mobius Predicts India’s IT Sector To Play Big Role In Global Semiconductor Production