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Chennai-based Ramco Systems Ltd has set up a wholly-owned subsidiary in US to tap the growing defence business, and has onboarded senior personnel from the US Army and Navy to take care of that sector.
“We have floated our defence organisation in US to take us to the global defence market in which we are seeing a very bright spot in our pipeline,” R Ravi Kula Chandran, CFO, Ramco, said during the Q3 FY22 earnings conference call.
Last year Ramco started working through the US defence contractors, who were taking its product and services to the US defence. That was a good proportion of the closures in the last year and early part of this year as well.
This prompted a comprehensive review of opportunity and the company is piloting to see whether it can directly work with US defence and increase our portfolio and then take it all across the globe into the defence market, he said.
Ramco’s Aviation, Aerospace and Defence (AAD) was predominantly on the commercial side and this opportunity posed to Ramco in the last year was a much bigger opportunity that the company wanted to really be in that space.
“We saw that as an opportunity to invest and grow our business significantly. That is the reason now that we have floated our company in US,” he said.
Q3 results
For the quarter ended December 31, 2021, Ramco reported reduced revenue of $17 million as against $23 million for the corresponding period last year.
The decline in revenue was mainly due to drop in closures in Asia, which was badly impacted by the Covid pandemic. Revenue from AAD in the December quarter was $5.83 million ($7.83 million).
On borrowings, Ramco in Q4 FY20 had a peak borrowing of ₹96 crore, which in the Q4 of 2020-2021 was brought down to zero and it continued till the September 2021 quarter.
“We have a modest borrowing of ₹9.8 crore at the end of the December 2021 quarter. There should not be a big spike of anything from the operational perspective. We do not expect any borrowing except for some of the investment activities,” he said.
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