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    Revenues Working Against Ramco Systems Limited's (NSE:RAMCOSYS) Share Price Following 26% Dive

    Simply Wall St·01/14/2026 00:02:24
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    Ramco Systems Limited (NSE:RAMCOSYS) shares have had a horrible month, losing 26% after a relatively good period beforehand. Looking at the bigger picture, even after this poor month the stock is up 30% in the last year.

    In spite of the heavy fall in price, Ramco Systems' price-to-sales (or "P/S") ratio of 2.8x might still make it look like a buy right now compared to the Software industry in India, where around half of the companies have P/S ratios above 3.9x and even P/S above 8x are quite common. However, the P/S might be low for a reason and it requires further investigation to determine if it's justified.

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    Check out our latest analysis for Ramco Systems

    ps-multiple-vs-industry
    NSEI:RAMCOSYS Price to Sales Ratio vs Industry January 14th 2026

    How Ramco Systems Has Been Performing

    Ramco Systems certainly has been doing a good job lately as it's been growing revenue more than most other companies. One possibility is that the P/S ratio is low because investors think this strong revenue performance might be less impressive moving forward. If not, then existing shareholders have reason to be quite optimistic about the future direction of the share price.

    Want the full picture on analyst estimates for the company? Then our free report on Ramco Systems will help you uncover what's on the horizon.

    Do Revenue Forecasts Match The Low P/S Ratio?

    The only time you'd be truly comfortable seeing a P/S as low as Ramco Systems' is when the company's growth is on track to lag the industry.

    Retrospectively, the last year delivered an exceptional 20% gain to the company's top line. Pleasingly, revenue has also lifted 33% in aggregate from three years ago, thanks to the last 12 months of growth. Accordingly, shareholders would have definitely welcomed those medium-term rates of revenue growth.

    Shifting to the future, estimates from the lone analyst covering the company suggest revenue should grow by 10% over the next year. Meanwhile, the rest of the industry is forecast to expand by 18%, which is noticeably more attractive.

    In light of this, it's understandable that Ramco Systems' P/S sits below the majority of other companies. It seems most investors are expecting to see limited future growth and are only willing to pay a reduced amount for the stock.

    What We Can Learn From Ramco Systems' P/S?

    Ramco Systems' P/S has taken a dip along with its share price. Typically, we'd caution against reading too much into price-to-sales ratios when settling on investment decisions, though it can reveal plenty about what other market participants think about the company.

    We've established that Ramco Systems maintains its low P/S on the weakness of its forecast growth being lower than the wider industry, as expected. Right now shareholders are accepting the low P/S as they concede future revenue probably won't provide any pleasant surprises. Unless these conditions improve, they will continue to form a barrier for the share price around these levels.

    There are also other vital risk factors to consider before investing and we've discovered 1 warning sign for Ramco Systems that you should be aware of.

    If companies with solid past earnings growth is up your alley, you may wish to see this free collection of other companies with strong earnings growth and low P/E ratios.