RAMCOSYS - Ramco Systems

📊 NSE: RAMCOSYS 🏢 Computers - Software - Medium / Small 📅 Last Updated: 12/14/2025 11:36

💰 Financial Performance

Revenue Growth by Segment

Consolidated revenue grew 12.2% YoY to INR 591.3 Cr in FY2025, primarily driven by improved order execution in the Aviation and ERP sectors. Recurring revenue grew at a healthy pace of 13% YoY in FY2024, while cloud-based subscription SaaS solutions now account for 60% of total revenue.

Geographic Revenue Split

The company operates through subsidiaries in 20+ countries including the USA (98% holding), Switzerland (100%), Malaysia (100%), Singapore (100%), and South Africa (100%). While specific % split per region is not disclosed, the global consolidated income for FY2023-24 was USD 64.41 million (INR 529.9 Cr).

Profitability Margins

Operating margin improved significantly to 13.7% in FY2025 from negative levels in FY2024, driven by a decline in provisioning for trade receivables and lower employee expenses. However, the company reported a net loss of INR 34.3 Cr in FY2025 due to high fixed costs, though this is a sharp improvement from the INR 243.78 Cr loss in FY2024.

EBITDA Margin

The company turned EBITDA positive in Q4 FY2024. Operating margins further expanded to 18.0% in Q1 FY2026 (up from 13.7% in FY2025) due to cost optimization measures and increased scale of operations.

Capital Expenditure

The company plans to spend approximately INR 80-100 Cr on Capex and R&D in FY2026, which is expected to be funded through internal accruals and promoter support.

Credit Rating & Borrowing

ICRA maintains a monitoring stance on the company's ability to achieve net profits. The company has high financial flexibility as part of the Ramco Group, supported by a recent INR 160 Cr equity infusion. It maintains a buffer in working capital limits of INR 45-50 Cr as of July 2025.

⚙️ Operational Drivers

Raw Materials

As a software company, the primary 'raw material' is human capital; employee expenses are the largest cost component and were reduced in FY2025 to improve margins.

Import Sources

Not applicable for software services; however, the company sources talent and maintains offices across 20+ global locations including India, USA, Singapore, and UAE.

Key Suppliers

Not applicable for software services; the company relies on its own proprietary software platforms and R&D.

Capacity Expansion

The company focuses on expanding its 'unexecuted order book' which stood at USD 188 million at the start of FY2025. Order bookings in Q4 FY2024 grew 19% YoY to USD 27.9 million.

Raw Material Costs

Not applicable; however, cost optimization measures led to a reduction in employee expenses and a decline in provisioning for trade receivables, which previously impacted margins.

Manufacturing Efficiency

Efficiency is measured by project execution timelines; typical execution for large MRO orders is 5 to 7 years, with revenue front-ended (approximately 40% in the first 2 years).

Logistics & Distribution

Distribution is handled digitally via cloud-based SaaS models, which now represent 60% of revenue, reducing physical distribution costs.

📈 Strategic Growth

Expected Growth Rate

17.80%

Growth Strategy

The turnaround strategy focuses on executing a USD 188 million order book, transitioning to a 60%+ SaaS/subscription revenue model to ensure recurring income, and targeting large-scale MRO (Maintenance, Repair, and Overhaul) contracts in the aviation sector, such as the Korean Air deal valued at over USD 10 million.

Products & Services

Enterprise Resource Planning (ERP) software, Aviation MRO software, Global Payroll solutions, and cloud-based SaaS subscription services.

Brand Portfolio

Ramco Systems, Ramco ERP, Ramco Aviation, Ramco Global Payroll.

New Products/Services

Modernized cloud-native ERP and Aviation software suites; subscription-based business now contributes 60% of revenue.

Market Expansion

Targeting global aviation majors and MRO providers; recently added 25 new clients in FY2025, contributing 6% of overall revenue.

Market Share & Ranking

Not disclosed, but recognized as an established player in the niche Aviation MRO software and ERP business.

Strategic Alliances

Part of the Ramco Group conglomerate; maintains a 30% associate stake in CityWorks (Pty.) Ltd., South Africa.

🌍 External Factors

Industry Trends

The industry is shifting toward subscription-based SaaS models (60% of RSL revenue). Future growth is driven by digital transformation in aviation MRO and integrated ERP solutions.

Competitive Landscape

Faces intense competition from large, well-capitalized global ERP and IT service providers.

Competitive Moat

Moat is built on niche product offerings in the aviation sector and a long-term track record with global industry majors. Sustainability depends on continuous R&D (INR 80-100 Cr/year) to prevent technology obsolescence.

Macro Economic Sensitivity

Highly sensitive to global IT spending trends and corporate CAPEX cycles, particularly in the aviation sector.

Consumer Behavior

Enterprise customers are increasingly preferring cloud-based, recurring-cost models over one-time license fees.

Geopolitical Risks

Exposure to 20+ countries including Sudan and China; vulnerable to changes in domestic and foreign government policies and trade barriers.

⚖️ Regulatory & Governance

Industry Regulations

Subject to global data privacy laws and software standards across 20+ jurisdictions; must comply with Section 197 of the Companies Act for director remuneration.

Environmental Compliance

Not a major factor for software services; ESG costs are not specifically disclosed as material.

Taxation Policy Impact

Effective tax rate is impacted by losses; the company reported a loss before tax of INR 265.42 Mln in FY2025.

Legal Contingencies

The company maintains adequate internal financial controls as per the Auditor's Report; no specific high-value pending court cases were quantified in the provided documents.

⚠️ Risk Analysis

Key Uncertainties

The primary uncertainty is the ability to achieve net profitability (PAT) despite being EBITDA positive, due to high fixed costs which led to a INR 34.3 Cr loss in FY2025.