Any current/future new fundraising through debt or equity?

Ramco Systems is not currently looking for any debt or equity raising activity. The company aims to retire the temporary debt taken in the recent quarter through increased bookings and large project go-lives in the next two quarters. With the ongoing large project implementations, they expect to invoice customers, improving working capital. The company anticipates managing working capital levels without needing additional debt or equity at this stage. For future funding, they believe reduced working capital requirements and small short-term debt should suffice, avoiding the need for significan

Any current/future capex/capital investment/strategic investment?

By end of the current year, most investments for aviation product will be completed, with some ongoing refinements. HR and payroll investments will continue but incrementally lower than before, focusing now on order booking and quick execution. Logistics and ERP investments made, with some additional investment expected for about one more year, but not significant. Future investments will mainly target automation, testing, execution, and implementation to improve speed and efficiency. The company aims to exploit the existing investments in aviation and HRP by year-end and then logistics and ER

Future growth expectations in sales/revenue/volumes?

Ramco Systems aims to stabilize and grow order booking, targeting a return to $23-$24 million quarterly order book from the current lower levels. Growth will be driven primarily by Advanced Aviation & Defense (AAD) and HR Payroll (HRP) segments initially, with Logistics and ERP expected to contribute in about a year. The company anticipates a shift from license sales with deferred payments to annuity and subscription models for steadier, recurring revenue. Investments focused on speeding up project execution, improving customer satisfaction, and increasing go-lives are expected to enhance reve

Future growth expectations in earnings/operating earnings/profits/EPS?

The company aims to increase order bookings from current low levels (~$20 million) back to around $23-$25 million per quarter to drive revenue growth. Revenue growth depends on the composition of order book (license, subscription, payroll processing) and timing of project go-lives, typically 3–8 months lag. Expect gradual increase in revenues as bookings improve; breakeven in the current financial year is uncertain, with management hoping but not guiding on profitability. Investments in aviation, HRP, and logistics ERP products nearing completion; future growth driven mainly by HRP and AAD (av

Current/ Expected Orderbook/ Pending Orders?

Unexecuted order book stood around $177.77 million as per Page 19 data. Order book comprises new orders, renewals, reversals, and adjustments for base foreign currency rates. Typical order book duration is about 3-4 years, with consumption over 15-20 quarters. Company aims to increase order booking to $23-$26 million per quarter to reach previous highs. Current order book shows some decline but efforts are ongoing to rebuild and stabilize. Large portion of order book involves implementation (initial period) followed by support and subscription services. Orders take between 3 to 12 months to go

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Ramco Systems LtdQ2 FY22IT - Software

Ramco Systems Ltd Q2 FY22 Earnings Call Analysis

Revenue, margin, capex, fundraise and order book outlook from management commentary.

Price: ₹710P/E: 32.8Market Cap: ₹1.4K CrSector: IT - Software

Management growth scorecard

Revenue

Category 3

Margin

Category 3

Fundraise

Order

Yes

Capex

1 of 5 growth signals are positive — mixed outlook.

Full analysis

Revenue guidance

Category 3

→Ramco Systems aims to stabilize and grow order booking, targeting a return to $23-$24 million quarterly order book from the current lower levels.
→Growth will be driven primarily by Advanced Aviation & Defense (AAD) and HR Payroll (HRP) segments initially, with Logistics and ERP expected to contribute in about a year.
→The company anticipates a shift from license sales with deferred payments to annuity and subscription models for steadier, recurring revenue.
→Investments focused on speeding up project execution, improving customer satisfaction, and increasing go-lives are expected to enhance revenue recognition in upcoming quarters.
→Marketing and travel expenses are planned to increase modestly to support sales efforts.
→Pipeline and win rates are improving, supported by certified connectors with Oracle and Workday, and efforts to expand into new geographies continue.
→Geopolitical and macroeconomic risks exist but are acknowledged as common across industries.

Margin guidance

Category 3

→The company aims to increase order bookings from current low levels (~$20 million) back to around $23-$25 million per quarter to drive revenue growth.
→Revenue growth depends on the composition of order book (license, subscription, payroll processing) and timing of project go-lives, typically 3–8 months lag.
→Expect gradual increase in revenues as bookings improve; breakeven in the current financial year is uncertain, with management hoping but not guiding on profitability.
→Investments in aviation, HRP, and logistics ERP products nearing completion; future growth driven mainly by HRP and AAD (aviation asset) products initially, followed by logistics and ERP.
→Operating costs expected to be stable, with incremental increases in salary and marketing related to growth.
→Order book execution and higher annuity revenue expected to stabilize and improve earnings over next few quarters.
→Bad debt provisions (~$2 million/quarter) continue but considered manageable.

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Fundraise plans

→Ramco Systems is not currently looking for any debt or equity raising activity.
→The company aims to retire the temporary debt taken in the recent quarter through increased bookings and large project go-lives in the next two quarters.
→With the ongoing large project implementations, they expect to invoice customers, improving working capital.
→The company anticipates managing working capital levels without needing additional debt or equity at this stage.
→For future funding, they believe reduced working capital requirements and small short-term debt should suffice, avoiding the need for significant new fundraising in subsequent years.

Order book

Yes

→Unexecuted order book stood around $177.77 million as per Page 19 data.
→Order book comprises new orders, renewals, reversals, and adjustments for base foreign currency rates.
→Typical order book duration is about 3-4 years, with consumption over 15-20 quarters.
→Company aims to increase order booking to $23-$26 million per quarter to reach previous highs.
→Current order book shows some decline but efforts are ongoing to rebuild and stabilize.
→Large portion of order book involves implementation (initial period) followed by support and subscription services.
→Orders take between 3 to 12 months to go live and contribute to revenue.
→Company is not planning additional debt/equity raising at this stage, expecting to manage with current working capital and live projects.
→Focus on diversifying product segments (ERP, HRP, AAD) and expanding geographies to improve order inflow.

Capex plans

→By end of the current year, most investments for aviation product will be completed, with some ongoing refinements.
→HR and payroll investments will continue but incrementally lower than before, focusing now on order booking and quick execution.
→Logistics and ERP investments made, with some additional investment expected for about one more year, but not significant.
→Future investments will mainly target automation, testing, execution, and implementation to improve speed and efficiency.
→The company aims to exploit the existing investments in aviation and HRP by year-end and then logistics and ERP within the next 6-12 months.
→No major jump in capital expenditure expected; focus is on continuous refinement and leveraging past investments.

How does Ramco Systems Ltd rank vs peers in IT - Software?

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1Ramco Systems Ltd

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