Onward Technologies receives ₹10.6 lakh penalty from Income Tax Dept

Onward Technologies received a penalty order of ₹10,59,664 from the Income Tax Department on July 31, 2026. The order, dated July 28, 2026, imposes the fine under Section 270A of the Income-tax Act, 1961, concerning tax assessments for FY19-20.

The penalty stems from the disallowance of certain expenses and taxation relief claims for the fiscal year 2019-20. The department cited a change in taxation law applied retrospectively and a specific interpretation of the law as the basis for the reassessment of declared income for that period.

Regulatory Disclosure

The company disclosed the development pursuant to Regulation 30 read with Para A(20) of Part A of Schedule III of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The disclosure was made to the BSE and NSE on August 14, 2026.

Particulars	Details
Authority	Income Tax Department
Penalty Amount	₹10,59,664
Relevant Section	Section 270A, Income-tax Act, 1961
Order Date	July 28, 2026
Receipt Date	July 31, 2026
Violation Basis	Disallowance of expenses/relief claims for FY19-20

Financial Impact and Recourse

Onward Technologies stated that the penalty will have a corresponding financial impact on the company but confirmed there is no material impact on its operations. The company noted it has the recourse to file an appeal against the order.

Managing Director Jigar Mehta signed the disclosure letter, confirming the details of the regulatory action taken by the tax authority.

1 Day	5 Days	1 Month	6 Months	1 Year	5 Years
-1.17%	+1.96%	-2.20%	-2.14%	-11.00%	+15.09%

Onward Technologies Limited delivered its highest-ever quarterly revenue of ₹151.2 crore in Q1 FY27, marking a strong start to the financial year. This represents an increase of 8.7% sequentially and 11.5% year-on-year. The company's EBITDA stood at ₹18.4 crore, growing 20% quarter-on-quarter, while Profit After Tax (PAT) was ₹11.2 crore, up 16.9% from the preceding quarter. The performance was driven by strategic investments in digital engineering and the expansion of its offshore delivery model.

Q1 FY27 Financial Performance

The company reported improvement in profitability metrics, with EBITDA margin expanding to 12.3% from 11.2% in the prior quarter. PAT margin for the period was 7.5%. The Board of Directors approved the financial results at a meeting held on July 16, 2026. The statutory auditors issued an unmodified review conclusion on the unaudited financial results.

The table below summarises the key financial metrics for Q1 FY27:

Particulars (₹ Crore)	Q1 FY27	Q4 FY26	QoQ %
Total Revenue	151.2	137.1	8.7%
EBITDA	18.4	15.3	20%
EBITDA Margin (%)	12.3%	11.2%	113 bps
Profit After Tax (PAT)	11.2	9.5	16.9%
PAT Margin (%)	7.5%	6.9%	52 bps

Operational Highlights

Onward Technologies secured a ₹33 crore contract to establish a dedicated Offshore Development Center (ODC) for a leading global power management company. The number of clients billing over US$1 million increased to 18 in Q1 FY27 from 16 in Q4 FY26. Additionally, the company successfully completed its Q1 FY27 share buyback programme, extinguishing 5,48,780 equity shares on June 11, 2026.

Management Commentary

Management stated that the results are outcomes of strategic investments made in digital engineering, ER&D, and offshore delivery expansion. The company is focusing on building capabilities in data centers, AI, and energy sectors to capture a large share of customer spending. The order book for the current year has crossed the previous year's revenue. Management remains confident of delivering double-digit revenue growth and double-digit EBITDA margin on an annual basis.