Current/ Expected Orderbook/ Pending Orders?

As of 30th September 2022, the unexecuted order book stands at approximately USD 181 million. The unexecuted order book typically spans 3 to 5 years, composed mainly of subscriptions, AMC, and services. New orders are signed as 3- or 5-year contracts, with revenue recognized over the contract period. Recent quarterly order bookings were around USD 17 million. The pipeline is about USD 580 million, with more than half in active and advanced stages, indicating a healthy flow of potential orders. Order booking in Asia, historically the strongest region, is showing an uptick after market reopening

Any current/future new fundraising through debt or equity?

There is no mention of any current or planned fundraising through debt or equity in the provided transcript of Ramco Systems Q2 FY23 earnings call. The focus appears to be on rebuilding markets, completing backlog projects, and improving execution. Investments are primarily in sales, marketing, DevOps, automation, and operational efficiency rather than fundraising. The company emphasizes stabilizing costs and managing attrition without indicating plans for additional capital raising. Pipeline and order bookings are highlighted as improving, indicating reliance on business growth rather than ex

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

The company has made significant investments in sales and marketing starting at the beginning of the current year, resulting in a strong pipeline build-up across all business units and geographies. Investments have been made in engineering and implementation areas through adoption of DevOps, CI/CD, test automation, and RPA to increase speed of implementation and operational efficiency. Increased investment focus is on automating processes and improving execution capabilities, expected to show positive results in coming quarters. No explicit mention of large future capital expenditure projects,

Future growth expectations in sales/revenue/volumes?

Priority is to bring booking and other metrics back to pre-COVID levels. No formal revenue guidance given, but normalization expected from next year onwards. Investments increased recently, showing early positive signs ("green shoots"). Expectation to bounce back to or better than pre-COVID business levels. Order booking for the year anticipated to improve steadily; pipeline across products and geographies is strong. Growth beyond USD 25 million order booking per quarter considered achievable over next 2-3 years. Focus on execution and closing backlog projects to enable smoother revenue recogn

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

Focus is on returning booking and revenues to pre-COVID levels, with expectations of normalization from next year (FY24) onwards. No formal revenue guidance provided, but the company is optimistic about growth beyond pre-pandemic levels. Current year (FY23) is seen as a consolidation and execution year, with improvement in order booking expected in coming quarters. Investments made during the pandemic have started showing positive results ("green shoots") across business segments. Attrition rate has improved from 32% during the pandemic to around 14% recently; expected to taper to 24%

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Ramco Systems LtdQ3 FY22IT - Software

Ramco Systems Ltd Q3 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 4

Margin

Category 3

Fundraise

N/A

Order

Capex

0 of 4 growth signals are positive — mixed outlook.

Full analysis

Revenue guidance

Category 4

→Priority is to bring booking and other metrics back to pre-COVID levels.
→No formal revenue guidance given, but normalization expected from next year onwards.
→Investments increased recently, showing early positive signs ("green shoots").
→Expectation to bounce back to or better than pre-COVID business levels.
→Order booking for the year anticipated to improve steadily; pipeline across products and geographies is strong.
→Growth beyond USD 25 million order booking per quarter considered achievable over next 2-3 years.
→Focus on execution and closing backlog projects to enable smoother revenue recognition going forward.
→Expansion in Aviation (Air Force, Defense, eVTOL, drones) and new markets (Asia, Europe) expected to contribute.
→Confidence expressed in scaling HRP business and leveraging Oracle-Workday collaborations for order growth.

Margin guidance

Category 3

→Focus is on returning booking and revenues to pre-COVID levels, with expectations of normalization from next year (FY24) onwards.
→No formal revenue guidance provided, but the company is optimistic about growth beyond pre-pandemic levels.
→Current year (FY23) is seen as a consolidation and execution year, with improvement in order booking expected in coming quarters.
→Investments made during the pandemic have started showing positive results ("green shoots") across business segments.
→Attrition rate has improved from 32% during the pandemic to around 14% recently; expected to taper to 24% (pre-COVID level) annually, aiding better manpower cost management.
→Cost increases are not anticipated; in fact, manpower costs are expected to decrease due to natural attrition and efficiency improvements.
→Strong pipeline across geographies and business lines supports confident outlook for growth in bookings and revenue.
→Profitability (operating earnings/EPS) impact depends on execution and converting the strong order book into revenue; immediate black quarters not expected yet.

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Fundraise plans

→There is no mention of any current or planned fundraising through debt or equity in the provided transcript of Ramco Systems Q2 FY23 earnings call.
→The focus appears to be on rebuilding markets, completing backlog projects, and improving execution.
→Investments are primarily in sales, marketing, DevOps, automation, and operational efficiency rather than fundraising.
→The company emphasizes stabilizing costs and managing attrition without indicating plans for additional capital raising.
→Pipeline and order bookings are highlighted as improving, indicating reliance on business growth rather than external fundraising.

Order book

→As of 30th September 2022, the unexecuted order book stands at approximately USD 181 million.
→The unexecuted order book typically spans 3 to 5 years, composed mainly of subscriptions, AMC, and services.
→New orders are signed as 3- or 5-year contracts, with revenue recognized over the contract period.
→Recent quarterly order bookings were around USD 17 million.
→The pipeline is about USD 580 million, with more than half in active and advanced stages, indicating a healthy flow of potential orders.
→Order booking in Asia, historically the strongest region, is showing an uptick after market reopening.
→The company expects better order booking in the upcoming two quarters, especially in H2 FY23.
→Despite a consistent order book, revenue conversion is paced due to the contract structure and execution timelines.

Capex plans

→The company has made significant investments in sales and marketing starting at the beginning of the current year, resulting in a strong pipeline build-up across all business units and geographies.
→Investments have been made in engineering and implementation areas through adoption of DevOps, CI/CD, test automation, and RPA to increase speed of implementation and operational efficiency.
→Increased investment focus is on automating processes and improving execution capabilities, expected to show positive results in coming quarters.
→No explicit mention of large future capital expenditure projects, but emphasis on strategic investments aimed at scaling the business, improving execution, and enhancing go-to-market effectiveness.
→The company is in a consolidation phase, closing backlog projects and focusing on efficiency rather than increasing costs or manpower substantially going forward.

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