Onward technology 4QFY26
(Tiny company trying to have larger goals but yet to prove)
Onward technology 4QFY26
(Tiny company trying to have larger goals but yet to prove)
Financials
Strongest year with about 550 cr in revenues for FY26, y-o-y growth of 10.5%.
Record EBITDA of 71.9 crs.
Gross margins highest at 13.2%.
PAT grew 72.3% y-o-y.
6.9% y-o-y growth in 4Q.
EBITDA margins at 11.2%
Commentary
Net cash at 127.2 crs.
Since the last 4 years, Revenue CAGR at 15.3%, EBITDA CAGR 35.4% while keeping head count largely stable.
Employee count: 2485. 125 outside India.
Revenue per employee to go up over the years. Used to be 8 Lakhs 4 years ago to now 22 lakhs.
Added net 6 new clients through referral in last 12 months.
Recommended dividend of 8 per share, 11th consecutive year of dividend payout.
Question/Answers
Onward is not an IT company. It’s an Engineering services company. They don’t do any product development. Pure play services company.
Board will look into buy back as price is attractive for both the company and investors.
No disruption from AI seen yet on engineering services companies.
50% revenue is mechanical and 50% is software.
70% revenue come from America and Canada. 30% from Europe.
Guidance
Expect operating leverage as Revenue kicks in. Double digit growth across all 3 verticals.
At least 2 or 3 clients have been for a decade out of top 5.
Goal is to grow revenues by 20% from current rate of 10%.
Client base has reduced from 250 to 75 and now target to make it 50.
Disclaimer: The stock mentioned is not an investment recommendation. This information is solely for educational purpose only. I write on companies listed in the Indian and the US stock market. For BUY/SELL recommendation, kindly reach out to your financial advisor.