Ramco Systems profit falls as costs outpace revenue growth
Operating margin narrowed 0.55 percentage points, while other income contributed 52.57% of pre-tax profit and the tax rate remained at 82.33%.
Filed 23 Oct 2026, 18:54 IST · after market close · Ramco Systems Ltd (RAMCOSYS)
Key takeaways
- Sequential revenue rose 5.32%, but expenses grew 6.00%, narrowing operating margin by 0.55 percentage points.
- Net profit fell 19.64% sequentially as pre-tax profit fell 26.67%, despite the tax rate easing by 1.38 percentage points.
- Operating margin at 14.18% was 5.47 percentage points below the 19.65% median of 23 reporting IT peers.
Price around the results
Revenue grew, but operating leverage weakened
On a consolidated basis, revenue increased 5.32% sequentially, while operating profit rose only 1.41%. Expenses grew 6.00%, faster than revenue, which reduced operating margin by 0.55 percentage points to 14.18%. The result was weaker operating conversion despite higher sales.
Lower other income and high tax limited earnings
Profit before tax declined 26.67% sequentially as other income fell 39.27%, while interest expense increased 6.25% and depreciation rose 1.51%. Other income accounted for 52.57% of pre-tax profit, making reported earnings partly dependent on non-operating income. The tax rate eased by 1.38 percentage points to 82.33%, but that was not enough to prevent net profit from falling 19.64%.
Ramco remains below the reported IT peer median
Ramco's 14.18% operating margin was 5.47 percentage points below the 19.65% median among 23 Information Technology companies that had reported the quarter. The margin also declined from 14.73% in Q1FY27, marking a sequential deterioration rather than an improvement in the latest quarter.
Shares fell after the results
The stock fell 4.60% on 26 October, after opening down 5.36%, with trading volume at 4.56 times the reference level. The move was a market response to the results filed after market close on 23 October.
Q2FY27 at a glance
Consolidated figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q2FY27 | Q1FY27 | QoQ |
|---|---|---|---|
| Revenue | ₹182 cr | ₹173 cr | +5.32% |
| Other income | ₹1 cr | ₹2 cr | -39.27% |
| Expenses | ₹156 cr | ₹147 cr | +6.00% |
| Operating profit | ₹26 cr | ₹25 cr | +1.41% |
| Operating margin (%) | 14.18% | 14.73% | — |
| Interest | ₹1 cr | ₹1 cr | +6.25% |
| Depreciation | ₹24 cr | ₹23 cr | +1.51% |
| Profit before tax | ₹3 cr | ₹3 cr | -26.67% |
| Tax | ₹2 cr | ₹3 cr | -28.03% |
| Net profit | ₹0 cr | ₹1 cr | -19.64% |
| EPS (₹) | ₹0.07 | ₹0.16 | -56.25% |
Operating margin of 14.18% compares with a Information Technology sector median of 19.65% across 23 peers that have reported Q2FY27.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | -4.60% | -5.28% |
Volume on the results session was 4.56× its 20-day average.
What to watch
- Whether operating margin returns to or exceeds 14.73% after falling to 14.18%.
- Whether expenses grow below the 5.32% sequential revenue pace.
- Whether other income remains a large contributor to pre-tax profit after accounting for 52.57% this quarter.