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INVESTMENT INSIGHTS

Check Before You Invest : Onward Technologies Ltd

BSE: 517536 NSE: ONWARDTEC ISIN: INE229A01017
  |   Sector:  IT & ITES   |   Industry:  IT - Software

Snapshot

Q.1 Which industry/sub-sector does Onward Technologies Ltd belong to?
Onward Technologies Ltd belongs to the IT & ITES sector, operating specifically within the IT - Software segment.
Q.2 Is Onward Technologies Ltd a good quality company?
Onward Technologies Ltd is a average quality company, based on a somewhat consistent multi-year financial track record.

This assessment is based on company’s performance on Revenue growth, ROCE, Equity and Assets, key margin ratios, cash conversion cycle, and debt to cash flow from operations and how it compares with its long term averages.

Q.3 Is Onward Technologies Ltd undervalued or overvalued?
Onward Technologies Ltd appears Fair, as its key valuation ratios are in line with their past averages.

Based on the industry it operates in, the relevant valuation ratios include one of the following, P/E, P/BV, P/Sales, EV/EBITDA or a combination of two or more.

Valuation Ratios Current 5-year
Historic Median
Price to Earnings 18.42 41.48
Price to Book 2.77 4.37
Price to Sales 1.42 2.43
EV to EBITDA 7.49 18.27
Q.4 Is Onward Technologies Ltd a good buy now?
Onward Technologies Ltd is a good buy now, based on strong price trend analysis suggesting prices may rise. However, you need to check its quality and valuation before making a decision

Performance Analysis

We have analysed the performance of the company on the following:

  • How has it performed on generating Profits?

    By checking its Revenue growth, Gross, Operating and Net Margins compared to its last 5-year median.

  • How efficiently has it utilized Capital?

    By checking its ROCE, ROA, ROE and its Cash Conversion Cycle.

  • How is it managing its Debt?

    By checking its Debt to Equity and Cash Flow from Operations.

A: What are the trends in revenue and profit margins?

Q.1 Revenue growth of Onward Technologies Ltd?
Onward Technologies Ltd revenue growth is 10.2% for FY-2025, which is below its 5-year CAGR of 16.11%, indicating slower growth.

Q.2 Gross Profit margin of Onward Technologies Ltd?
Onward Technologies Ltd Gross profit margin which is the profit after deduction of direct costs, is 12.2% for FY-2025, which is in line with its 5-year median of 12.2%, indicating stable margins.

Q.3 Operating Profit Margin of Onward Technologies Ltd?
Onward Technologies Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 9.99% for FY-2025, which is in line with its 5-year median of 9.99% indicating stable margins.

Q.4 Net Profit Margin of Onward Technologies Ltd?
Onward Technologies Ltd Net Profit Margin is 6.4% for FY-2025, is in line with its 5-year median of 6.4%, indicating stable margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 12.2 12.2
Operating Profit Margin (%) 9.99 9.99
Net Profit Margin (%) 6.4 6.4

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Onward Technologies Ltd?
Onward Technologies Ltd Return on Asset is 8.62%, which is in line with its 5-year historical median of 8.62%, indicating stable asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Onward Technologies Ltd?
Onward Technologies Ltd Return on capital employed is 18.33% for FY-2025, which is in line with its 5-year historical median of 18.33%. The current ROCE is above its estimated weighted average cost of capital (WACC) of 14%, indicating value creation.

Q.7 Return on Equity (ROE) of Onward Technologies Ltd?
Onward Technologies Ltd Return on equity is 12.91% for FY-2025, which is in line with its 5-year historical median of 12.91%, indicating the business is making similar use of its shareholders capital.

Q.8 Cash conversion cycle of Onward Technologies Ltd?
Onward Technologies Ltd Cash conversion cycle is 54 days, in line with its 5-year historical median of 54 days, indicating stable working capital management. However, you need to compare this with its peers in the industry.
Current Level 5-year
Historic Median
Asset Turnover (x) 1.35 1.41
ROE (%) 12.91 12.91
ROCE (%) 18.33 18.33
Cash Conversion Cycle 54 days 54 days

C: How much debt does the business have and is it at a sustainable level?

Q.9 Debt to Equity ratio of Onward Technologies Ltd?
Onward Technologies Ltd Debt-to-Equity ratio is 0.00, which is lower the industry average of 0.01, indicating lower debt levels in the industry.

Q.10 Debt to cash flow from operations of Onward Technologies Ltd?
Onward Technologies Ltd Debt to cash flow from operations is 0, which is at a healthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Onward Technologies Ltd?

Q.1 Promoter shareholding and pledge status of Onward Technologies Ltd?
Promoters hold 39.07% of the Onward Technologies Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Onward Technologies Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Onward Technologies Ltd vs industry peers?
Onward Technologies Ltd revenue CAGR is 16.11%, compared to the industry median CAGR of 2.48%, indicating faster growth and gaining its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) 10.2 2.5
Gross Profit Growth (%) -6 18.3
Operating Profit Growth (%) -7.3 18
Net Profit Growth (%) -14.3 22
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 1.35 0.46
ROE (%) 12.91 3.97
ROCE (%) 18.33 6.41
Cash Conversion Cycle (days) 53.9 36

Valuation & price assessment

Q.1 Stock return of Onward Technologies Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of 13.7% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR		 13.7% 16.5% -13.4% -10.4%
Q.2 Valuation ratios of Onward Technologies Ltd vs historical?
The current P/E ratio of 18.42 is lower than its historical median of 41.48, indicating that the stock is trading below its historical average valuation.
Q.3 How do the current valuation ratios compare with 5-year historical median and industry numbers?
Valuation Ratios Current 5-year
Historic Median		 5-year
Industry Median
Price to Earnings 18.42 41.48 47.38
Price to Book 2.77 4.37 2.64
Price to Sales 1.42 2.43 4.79
EV to EBITDA 7.49 18.27 16.75

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