Onward Technologies reported a record Q2 FY27, with revenue hitting Rs 170.2 crore, up 22.4% YoY. Profit after tax rose 41.2% to Rs 16.8 crore. Driven by strong demand in digital engineering, the company has raised its FY27 revenue growth guidance to 15-18%. While the performance is robust, shareholders should keep an eye on rising receivable days, which management expects to normalize in coming quarters.
Onward Technologies Reports Record Q2 FY27 Performance
Revenue Rs 170.2 crore (up 22.4% YoY); PAT Rs 16.8 crore (up 41.2% YoY).
Reader Takeaway: Strong demand and order visibility drive guidance upgrade, while management monitors working capital and DSO levels.
What just happened
Onward Technologies delivered a strong second quarter, achieving record revenue of Rs 170.2 crore. EBITDA saw a significant jump of 33.7% YoY to Rs 26.6 crore, resulting in healthy margins of 15.6%. Net profit grew by 41.2% to Rs 16.8 crore compared to the same period last year. Following these results, the company raised its full-year FY27 revenue growth guidance to 15-18%.
Why this matters
The company’s ability to secure large-scale contracts, including a Rs 44.5 crore engagement with a global mining equipment leader, highlights strong demand for its digital engineering services. Expanding the number of $1 million+ clients from 16 to 18 indicates successful customer mining and retention strategies. These factors, combined with improved execution, have bolstered management's confidence in the company’s forward growth trajectory.
Risks to watch
Investors should monitor the rising Days Sales Outstanding (DSO), which reached 80 days this quarter. Management attributed this to rapid growth and temporary payment delays, targeting a return to 65-70 days. Additionally, potential shifts in U.S. visa and immigration policies remain a risk to the onsite delivery model, requiring careful monitoring of operational costs and execution strategies.
Context metrics
Management is currently focused on capacity expansion across four Indian delivery centers. Furthermore, the company is preparing for future AI integration with a dedicated Chennai AI lab expected to be operational by early 2027 to drive productivity and long-term innovation.
What to track next
Watch for the normalization of receivable days in Q3 and Q4. Additionally, observe the progress on the Chennai AI lab and the company's success in hiring subject matter experts to meet the increased order book requirements.