Despite aviation downturn, Ramco upbeat about Enterprise One

Anand Krishnamoorthy in Chennai

Chennai-based Ramco Systems Ltd is cautiously optimistic about the prospects of Enterprise One, its enterprise maintenance system solution for the global aviation industry. The product is being developed and marketed in association with Boeing Company, USA.

“Due to the downturn in the aviation sector, we will achieve the lower end of our estimates from the solution which is about $150 million over a five-year period. This is provided the external conditions do not deteriorate further,” said Mr Lakshmi Narasimhan, president, Ramco Systems, in a meeting with The Financial Express.

Earlier, the company had estimated revenues of $150 million to $600 million over a five-year period. In a downturn, new purchases such as aircraft could take a backseat while maintenance expenditure will increase, the president added. Boeing will finalise the marketing strategy for the Enterprise One by January 2002. The proptotype of the solution has been provided to Boeing.

Meanwhile, the company is in advance stages of negotiations to conclude four large IT services deals which are multi-year, multi-million dollar contracts. “The deals are from the US-based companies in the banking, financial services and insurance domain,” Mr Narasimhan said.

These deals will provide Ramco with a stable revenue stream equivalent to about half the internal projected revenues for the coming years. He declined to name the companies or provide the revenue potential from the deals.

Among other things, Ramco has identified a company in Eurpoe for acquisition.

“It is a 75-employee company with a single major customer accounting for 70 per cent of the revenues. We have done a preliminary due diligence and have made a revised offer due to the downturn in the valuations of IT companies,” the president said.