Onward Technolog Q2 FY27 Results (NSE: ONWARDTEC)
Signal: Margin expansion
The read
The trajectory improved materially after Q1FY27: consolidated revenue growth accelerated to +22.5% YoY from +12.0%, operating margin recovered to 15.6% from 12.3% sequentially, and PAT rose 40.5%, but the ₹292.60 lakh R&D credit and a 47.3% H1 operating-cash-flow decline temper the quality of the rebound.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹170.18 Cr | +22.5% | +13.9% |
| EBIT | ₹21.77 Cr | +58.6% | |
| Net profit | ₹16.77 Cr | +40.5% | |
| EPS | ₹7.65 | +45.4% | |
| EBIT margin | 15.6% |
P&L walk
Consolidated revenue accelerated to ₹17,017.71 lakh, +22.5% YoY and +13.9% QoQ, while EBITDA margin improved to 15.6% from 14.3% YoY and 12.3% QoQ; PAT rose 40.5% YoY, helped by the ₹292.60 lakh R&D credit and lower other-income dependence.
Segments
The Group reports a single operating segment; geographically, North America was the main growth engine at ₹6,215.16 lakh, +37.9% YoY, versus consolidated revenue growth of 22.5%.
Key positives
- Consolidated revenue reached ₹17,017.71 lakh, growing +22.5% YoY and +13.9% QoQ, with growth accelerating from +12.0% YoY in Q1FY27.
- North America revenue rose 37.9% YoY to ₹6,215.16 lakh, materially faster than the Group's 22.5% revenue growth.
- Operating margin improved to 15.6%, up 129bps YoY and 330bps QoQ, while derived EBITDA growth of about 33.6% exceeded revenue growth of 22.5%.
- Basic EPS increased 45.4% YoY to ₹7.65, supported by the lower share count after the buyback.
Key concerns
- The ₹292.60 lakh R&D credit from finalisation and true-up of prior eligible R&D expenditure is a material non-recurring support to current-period expenses and margin.
- H1 operating cash flow fell 47.3% YoY to ₹1,844.79 lakh while trade and unbilled receivables increased to ₹14,790.68 lakh from ₹11,999.70 lakh at March 31, 2026.
- Consolidated operating margin of 15.6% remained below standalone margin of 19.2%, indicating subsidiaries dilute parent-level profitability.
Research and educational content only. Not investment advice.