While the rest of the tech stocks have shed some of their early gains of late, the Ramco Systems stock continues to gain ground.

From a recent low of Rs 118 touched on 13 November 2002, the stock has risen to Rs 599.55 on 24 January 2003, which means a gain of 408.09% in slightly less than three months.

The BSE IT Sector Index, in contrast, has gained only 2.63% in the same period. Interestingly, average daily volumes on the Ramco Systems counter have risen multi-fold - to over 200,000 shares from around 2,000-3,000 shares in the same period.

The sharp surge on the counter was attributed to increased speculative activity on the back of a slew of positive developments. There were rumours that Rakesh Jhunjhunwala has mopped up major chunks of the stock in the last two to three months.

Last month, Ramco Systems said that it had won a Rs 5-crore order from Tirupati Tirumala Devasthanam to develop an integrated system for front-office solutions and back-office automation for various departments.

Ramco Systems will be working closely with Reliance Infocomm, part of the Reliance Group, which will be carrying out the infrastructure provisioning for Tirupati Tirumala Devasthanam.

Earlier this month, Ramco Systems announced that it bagged a work order from the Andhra Pradesh government to design, deploy and implement human resources management solutions, self-service and learning management solutions. The order is to develop, implement and rollout next-generation HRMS. The consortium, led by Ramco Systems, comprises Hewitt Associates and The Boston Group.

The company had said that the consortium could bag this order on the strength of a word-class application building expertise channelled through a unique Web-based rapid solution delivery infrastructure called Ramco VirtualWorks along with global HR consulting and learning management systems experience.

The company expects substantial growth starting this year. Although it is an old company, it has been working on a technology that takes 7-8 years to build. The company has been successful in making some technology breakthroughs. The company sees some improvement next financial year, expecting to grow by at least by 30%.

Previously, a pure ERP company and a major player in that segment, Ramco System's fortunes were hit in the last couple of years as the ERP market went into a tailspin. A global slowdown in the IT sector added to its woes. With a view to diversify, Ramco Systems made the transition from a pure ERP product firm into a complete vendor of solutions and services of enterprise applications. But to do so, it had to invest big in e.applications, a Net-based transaction processing solution for enterprises, and RamcoVirtualworks, a component-based architecture in which an application is developed by assembling pre-built components (thus cutting cost and time).

The financial performance of the company in the recent past is not very impressive. For the second quarter ended 30 September 2002, it registered a net loss of Rs 6.17 crore as compared to a loss of Rs 2.69 crore in the corresponding period last year. Net sales declined by 15.5% to Rs 25.47 crore from Rs 30.47 crore in SQ 2001.

In FY 2001-02, the company reported a net loss of Rs 8.76 crore as against a net profit of Rs 1.04 crore in FY 2000-01. Net sales fell by 21.9% in FY 2001-02 to Rs 93.84 crore from Rs 120.24 crore in FY 2000-01.