Ramco Systems Q3 net profit grows 20%

Ramco Systems Ltd reported a 20 per cent increase in net profit to ₹12 crore for the third quarter ended December 31, 2015 when compared with ₹10 crore in the same quarter last year. Revenue increased by 9 per cent to ₹116 crore (₹106 crore).

This is the seventh consecutive quarter that the Chennai-based software company has made profit, said its CEO Virender Aggarwal. There is still a degree of fluctuation. However, the company has made a turnaround in the last one year, he told newspersons when asked whether the profitability is sustainable.

The company has an order book of $75-80 million with major focus on its HR product and ERP solutions for sectors such as retail and logistics. Last quarter was ‘logistics quarter’ with the company winning significant deals in Australia and the Philippines, he said.

In the last one year, the company has become a zero-debt company from having nearly ₹365-crore debt. Ramco raised ₹325 crore under Qualified Institutional Placement to repay the debt and increase marketing spend, he said.

After becoming a zero-debt company, the focus was around profitability and generating cash. “This has been our journey in the last one year,” he said.

Aggarwal said the company has taken an 18.93 per cent stake for ₹1.50 crore in the Chennai-based SmartMegh, which is an implementation partner for Ramco. With around 100 consultants, SmartMegh has been implementing cloud-based solutions in India, Asean and West Asian. Aggarwal announced the roll out of niche ERP for the logistics sector – Ramco Logistics Software – that offers an integrated cloud-based platform for third party logistics, freight forwarders and parcel/courier service providers. The growth of e-commerce has triggered a renewed interest in the sector and last mile connectivity is crucial for the logistics sector.

Ramco plans to foray into China offering its aviation solutions in the next five months. It is present in Hong Kong and Taiwan. Some of the existing multinational customers like Atlantis have a presence in China and they want Ramco’s solutions in that country, he said.

Aggarwal said that Ramco has a strong presence in the helicopter sector. However, due to the high oil price, business from this sector has come to a halt. However, the strong demand for HR product has compensated the loss in the aviation business, he said.

Stock price of Ramco Systems on the BSE closed at ₹615.90, an increase by 0.02 per cent.

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