Ramco Systems reported a sharp decline in its consolidated net profit for Q1FY26, dropping to ₹5.62 million from ₹10.82 million in the same quarter of FY25. The deterioration was largely attributable to a one-time tax charge of ₹20.54 million arising from the company’s irrevocable election to adopt the New Tax Regime (NTR) effective from Tax Year 2026-27. Despite the consolidated headwinds, the standalone entity delivered robust growth, with net profit rising to ₹86.88 million from ₹48.82 million year-on-year, supported by higher dividend income and controlled expenses.

The Board of Directors approved the unaudited financial results for the quarter ended June 30, 2026, in a meeting held on July 23, 2026. The results were reviewed by the Audit Committee and subjected to a limited review by Statutory Auditors M.S. Jagannathan & N. Krishnaswami, who issued an unmodified report. The filing was made pursuant to Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Financial Performance

Consolidated revenue from operations stood at ₹1,727.70 million (USD 18.38 million) for Q1FY26, compared to ₹1,613.17 million (USD 18.95 million) in Q1FY25. Total income increased to ₹1,749.64 million from ₹1,648.34 million in the prior year. However, total expenses rose to ₹1,715.15 million from ₹1,555.81 million, primarily due to higher other expenses, which included foreign exchange fluctuation losses of ₹18.88 million compared to gains of ₹22.20 million in the previous year.

On a standalone basis, revenue from operations decreased slightly to ₹853.89 million from ₹877.68 million in Q1FY25. However, total income rose to ₹985.87 million from ₹910.12 million, driven by a substantial increase in other income to ₹131.98 million from ₹32.44 million. This boost was largely due to dividend income from wholly owned subsidiaries, which reached ₹116.99 million in the current quarter versus nil in the prior year.

Key Operational Updates

The Board also approved changes in key managerial personnel. Mr. Ravikula Chandran R will retire as Chief Financial Officer (CFO) upon superannuation on November 30, 2026. Mrs. Gayathri R, a Chartered Accountant with the company since February 2003, has been appointed as the new CFO and Key Managerial Personnel, effective December 01, 2026. Her appointment follows recommendations from the Nomination and Remuneration Committee and approval from the Audit Committee.

Additionally, the company allotted 122,334 equity shares under its Employees Stock Option Schemes (ESOS) during the quarter. This issuance increased the paid-up equity share capital to ₹376.19 million from ₹374.97 million as at March 31, 2026. The ESOP cost amortized during the quarter was ₹10.23 million for both standalone and consolidated figures.

What the Numbers Show

The divergence between standalone and consolidated results highlights the impact of international operations and tax restructuring. While the Indian entity benefited from significant dividend inflows and stable operational margins, the global group faced margin pressure from foreign exchange losses and a one-time tax adjustment. The adoption of the New Tax Regime, while beneficial for long-term MAT credit utilization, created a short-term headwind in Q1FY26 earnings. Investors should monitor whether the NTR transition impacts future deferred tax liabilities and cash flows in subsequent quarters.

Ramco Systems appointed Mr. Raghuveer Sandesh Bilagi as Chief Executive Officer and Key Managerial Personnel effective July 02, 2026. Bilagi, who previously served as President & Chief Operating Officer, succeeds the former leadership to lead the company's next phase of global growth and transformation into an AI-native enterprise software company. The appointment was approved by the Board of Directors based on the recommendations of the Nomination and Remuneration Committee.

Bilagi brings over two decades of experience in enterprise technology, having built and scaled businesses across sales, delivery, and operations. He founded Ramco's Australia & New Zealand business, which is now one of the company's strongest markets. His tenure includes steering the organization through two leadership transitions and maintaining stability during the COVID-19 pandemic by combining commercial discipline with delivery excellence.

Prior to joining Ramco Systems, Bilagi held leadership positions at HCL Technologies and Tech Mahindra. He has a track record of driving strategic growth, establishing offshore development centres, and closing landmark engagements, including deals worth over USD 550 million with leading Australian corporations. A Chartered Accountant from the Institute of Chartered Accountants of India and a CPA from CPA Australia, he holds a Bachelor of Commerce from Karnatak University, Dharwad.

Appointment Details

The Board's decision was formalized under Regulation 30 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. The following table outlines the key details of the appointment:

P.R. Venketrama Raja, Chairman, Ramco Systems, stated that the company has emerged stronger with six straight quarters of operational profit, evidence of a genuine turnaround. P.V. Abinav Ramasubramaniam Raja, Managing Director, added that Bilagi combines a builder's instinct with an operator's rigour to accelerate global expansion and embed AI at the core of products. Bilagi expressed his commitment to sustaining profitability and driving global growth across HR & Global Payroll, Aviation, ERP, Logistics, and Chia product lines.