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Dolat Capital Report
Ramco Systems Ltd. reported USD revenue growth of 2.3% QoQ (our estimate: -2.6%) led by Aviation segment growth of 14% QoQ. Ebitda margins finally turned positive after 10 quarters and stood at +1.6% against -3.5% in Q3 (our estimate: +2.9%) led by steady focus on cost optimization, which management aims to sustain throughout FY25. Ebitda (Ex of Fx) stood at Rs 76 million.
Management refrained from providing specific guidance but emphasized three key priorities:
Maintaining a healthy order book, which ensures revenue visibility;
Sustaining robust growth in recurring revenues; and
Continued focus on improving Ebitda and conserving cash.
Ramco Systems expects growth to accelerate by FY26, while in the interim focus will be on improving profitability. Taking this commentary into account, we have revised our FY25/FY26 revenue growth estimates by 3%/2% and in-turn expect it to turn PAT positive by H2 FY26.
Maintain ‘Buy' rating with a DCF based target price of Rs 450 (implies P/S of ~2.7 times on FY26E basis).
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