![Sundar Subramanian, CEO, Ramco Systems Sundar Subramanian, CEO, Ramco Systems](/theme/images/th-online/1x1_spacer.png)
Sundar Subramanian joined the Chennai-based Ramco Systems in July 2023 as its CEO to build upon the company’s portfolio of enterprise offerings with a renewed focus on execution and growth. That’s what he has tried to do in the past year, with a focus on recovery and cost optimisation. “We reduced the number of employees by nearly 400 and had to write off $15.1 million. We are now debt-free and focusing more on profits,” he told businessline in an interview. Excerpts:
How were the Q1 financial results?
We had a reasonably good quarter in Q1 [In the June 2024 quarter, the company reported a reduced net loss of ₹20 crore on revenue of ₹137 crore, compared to a net loss of ₹47 crore on revenue of ₹140 crore for the same period last year]. We grew by about 4 per cent q-o-q, which is pretty good given the environment. We are focusing more on profits and are in the process of a turnaround. Cash flow has become positive now due to large wins. Overall, it has been a very positive quarter across all segments.
What measures are being taken on profitability?
We have become debt-free in the last two quarters. Our collections were not very strong, as many customers were not paying us. This was a significant problem, but we have addressed it. Our bank balance is now in a good position. We are now EBITDA-positive and are on the path to profitability. It’s a time for transformation for the 25-year-old company. We are turning the Titanic in a different direction, so it will take time.
What were the major measures taken?
One of the measures we took for cost optimisation was resource optimisation. We had too many people, so we optimised resources some time ago. We reduced the workforce by around 400 people over 4-5 months. Some of these reductions were voluntary, and there was also attrition. We did not replace these positions. Across the board, we increased prices, as we had been underpriced for a very long time. These measures helped improve profitability, but it is a journey. It will take time, but it is trending positively.
How about the deal wins?
We closed at about $19 million last quarter, which is fairly good. This follows around $23 million in the previous quarter, during which we won a very large order from Korean Airlines. Generally in terms of the order book, we are in a very good shape at this point in time.
You came on board Ramco a year ago. What transformation measures have you implemented?
One aspect was on the financial front, focusing on deal review and improving profitability. There were several non-paying customers. We cut the service to them, and many returned and started paying. That’s what the telephone operators do to you, right? We did the same thing. We are a product company, and there were areas where we were not profitable. We eliminated all those aspects.
For example?
The container management in logistics. We will not touch it. We excluded some geographies and products and decided to focus only on a few things and do them well. Technology is being modernised, and we are implementing a low-code platform to make it very user-friendly.
Where do you see the momentum going?
The transformation story spans 18 to 30 months. It is a challenging process. Last year was about recovery, and we wrote off $15.1 million. We completely cleaned the book. We are moving towards a state where we believe things will become more predictable. This year, we are focusing on stability in terms of processes, customers, products, financials, including decent cash flow. From year three onwards, we will start pushing for growth. That’s what we are really aiming for.
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