Onward Technologies delivered robust financial performance in Q3 FY26, demonstrating strong execution across its three key verticals while maintaining its commitment to sustainable double-digit growth. The company's strategic focus on offshore delivery expansion and leadership restructuring has positioned it well for continued growth trajectory.

Financial Performance Highlights

The company achieved impressive financial metrics for the nine-month period ended December 31, 2025. Revenue performance and profitability showed significant improvement compared to the previous year.

The quarterly revenue of ₹136.1 crores came in better than expected, despite seasonal furloughs from customers. Managing Director Jigar Mehta noted that the company had budgeted more effectively for furloughs this year, with several client engagements and contracts ramping up to bring revenue close to Q2 levels.

Leadership Restructuring and Strategic Focus

Onward Technologies has completed a significant organizational transformation, moving from a promoter-driven structure to a professionally-led, vertical-focused leadership model. The company now operates through three distinct verticals, each with dedicated leadership.

The IEHM vertical continues to focus on delivery-led growth with marquee clients in North America, while exploring expansion opportunities in Europe. The Transportation & Mobility vertical maintains its strong presence in the GCC market and is building capabilities in the US and European markets. The HCLS vertical, being relatively new, is focused on deepening existing client relationships and building credibility.

Infrastructure and Capacity Expansion

The company has made substantial capital investments in offshore delivery capabilities across multiple locations. Infrastructure upgrades have been completed in Pune, Chennai, Bangalore, and Hyderabad to support the growing offshore business model.

Capacity Enhancement Details:

• Pune and Hyderabad: Operating at full capacity
• Chennai: Recently opened with additional hundreds of seats
• Future Growth: Majority of new offshore headcount will be added in Chennai
• Target Headcount: Approximately 3,000 employees by $100 million revenue milestone

This infrastructure expansion directly supports the company's margin improvement strategy, as offshore engagements typically deliver higher margins compared to onsite work. The shift toward offshore delivery has been a key driver of the EBITDA margin expansion to 13.9%.

Business Model and Growth Strategy

Onward Technologies maintains a predominantly time-and-material business model, with approximately 90% of revenue coming from T&M contracts. Mehta emphasized the company's intention to maintain this mix until reaching ₹1,000 crores in revenue, citing the model's sustainability, steady cash flows, and customer flexibility.

The company serves over 70 customers but focuses on deepening relationships with existing clients rather than aggressive new customer acquisition. Management noted that they represent less than 1% of their customers' outsourcing budgets, indicating substantial growth runway within existing relationships.

Key Strategic Priorities:

• IEHM Vertical: Transition toward digital and AI services
• T&M Vertical: Expand large OEM client relationships in Europe and US
• HCLS Vertical: Continue investment and capability building
• Geographic Expansion: Increase US market presence from current 30% revenue share

Financial Position and Capital Allocation

The company maintains a strong balance sheet with cash and bank reserves of ₹116 crores. Management continues to evaluate various capital allocation options including acquisitions, dividend enhancements, and infrastructure investments.

Regarding acquisitions, the company remains open to opportunities, particularly those involving competitors already serving existing customers. However, management emphasized a disciplined approach, focusing on long-term value creation rather than short-term revenue additions.

Outlook and Guidance

Onward Technologies reaffirmed its commitment to delivering double-digit revenue growth and double-digit EBITDA growth for three consecutive years. The company's performance in the first nine months of FY26 demonstrates strong progress toward these targets, with both metrics exceeding initial projections.

The leadership team expressed confidence in the company's positioning across all three verticals, supported by the new organizational structure and enhanced offshore delivery capabilities. With substantial infrastructure investments completed and a strong leadership team in place, the company appears well-positioned for sustained growth in the coming years.

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