Onward Technologies (NSE:ONWARDTEC) Q1 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to Q1 FY twenty seven earnings conference call for Onward Technologies Limited hosted by Goinda Advisors. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Please note that this conference is being recorded. I now hand the conference call over to mister from Go India Advisors. Thank you, and over to you, sir. Thank you,. Good afternoon, everybody, and welcome to Onward Technologies Limited earnings conference call to discuss the q one FY twenty seven results. We have on the call Mr. Jiga Mehta, managing director.

0:51 We must remind you that the discussion on today's call may include certain forward looking statements and therefore, be viewed in conjunction with the risks that the company may face. May I now request Mr. Jagermata to take us through the company's business outlook and performance, subsequent to which we will open the floor for question and answers. Thank you, and over to you, sir. Thank you, Lal. Good evening, everyone, and thank you for joining us today. Q1 FY 'twenty seven marks an important milestone in ONWARD Technologies' journey and represents a strong start to the new financial year. We delivered a higher third quarter revenue of INR151.2 crores crossing the INR150 crores milestone for the first time with revenue growing 11.5% year on year and 8.7% sequentially quarter on quarter.

1:39 Our EBITDA increased to INR18.4 crores, growing 20% quarter on quarter, while EBITDA margins improved by 113 basis points sequentially to 12.3%. Profit after tax stood at INR 11.2 crores, up 16.9% sequentially, demonstrating improving operating momentum as we enter FY 2027. Beyond the financial performance, we continue to strengthen the quality of our business from our existing clients. During the quarter, we won 33 crore offshore development center engagement with a leading power global power management company from North America and also increased the number of customers generating over a U. Million dollar per year revenue, annual revenue from 16 to 18 customers, reflecting deeper account penetration and stronger steady and strategic relationships with our customers.

2:35 We do believe that majority of our customers, if not all, have the potential to get to 1,000,000 per year and majority of them in that majority of them potential to $10,000,000 per year. What excites me most with about these results of Q1 are not driven by a single client, a single geography or a onetime event. These are the outcome of strategic investments we have made over the last few years in digital engineering, in the R and D, in offshore delivery expansion, leadership capability and account mining. Today, we are beginning to see these investments translated into greater scale, stronger execution and improving operating leverage. We continue to invest in subject matter experts across all the three lines of business, which is mechanical engineering, embedded in digital, in lab infrastructure, proof of concept development, engineering accelerators and the user variety that enhance our ability to win larger, higher value engagements across our targeted industry segments.

3:35 These investments are strengthening our competitive differentiation, improving speed to value for customers and creating a scalable platform for future growth, deeper account penetration and longer term margin expansion. We are also seeing increased demand I'm sorry, sir. We are not able to hear you if you are speaking. Yeah. Sorry. Sir, now we can hear you. You may please continue. Oh, we are also seeing increased demand from our global enterprises, investing in software defined products, AI enabled engineering, automation, digital manufacturing, intelligence products.

4:30 The huge expansion which is happening across North America and Europe on data centers and AI and energy are the areas where Onward is focusing now to build newer capabilities and stronger capabilities and where we believe we are well positioned to capture a large share of customer spending over the coming years. Importantly, we completed our we also completed our first ever buyback program during the quarter, reinforcing our confidence in the business, our cash generation capabilities and our long term growth outlook. As committed, the promoters did not participate in the buyback program. As we look ahead, our focus remains unchanged, accelerating revenue growth, expanding margins, increase in wallet share within our strategic clients, scaling our offshore delivery model and continue our evolution into a digital engineering and R and D partner for our global industrial enterprises.

5:22 While macroeconomic uncertainties remain, we enter the balance of 05/27 with record revenues, a stronger client portfolio, a strong growing pipeline, and significant opportunities ahead. What's even more exciting for me to share with all of you today that our order book or ACV for this year has crossed last year's revenue, and we have amazing trajectory and a sales funnel as we good... As we are deliver q two, q three, and q four of this financial year. Before I hand over back to the... To love, I want to just sort of give you three key takeaways. We have delivered a strong first, we delivered a strong start FY 'twenty seven with record revenue, improving sequential profitability and continued momentum across our strategic customers.

6:10 Second, the quality of our business continues to improve as evidenced by the growth in our strategic customer base, increased offshore opportunities and larger engagement. Third and most importantly, we believe we building a company that is significantly stronger, more scalable and better positioned than ever before. Our investments in talent, engineering capabilities, offshore delivery and strategic accounts are creating a solid foundation for sustainable growth and long term value for everybody in our ecosystem. While we remain disciplined and realistic about the evolving macroeconomic environment, we are upstream of of... We are optimistic about the opportunities ahead. We have entered FY 'twenty seven record revenues and improving operational momentum. We crossed INR 150 crores this quarter. Our ambition is much bigger.

6:58 We are building the capabilities, capital relations and operating platform required for the next chapter of ONWARD's growth journey, and and we believe the best is yet to come. Thank you again for your continued trust and support. We remain committed to delivering profitable growth, creating long term value for our shareholders and establishing on the technology when you do global digital engineering and the R and D partner. With that, I hand it over back to now. Thank you. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on the touch tone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handset while asking a question.

7:47 Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of from Maximal Capital. Please go ahead. Yeah. Hi, team. I hope I'm audible. Yes. You are. So just... Question is, you know, with respect to the auto segment specifically. So what are... What is another growth expectations this year in the... For our, you know, auto projects and all? I mean, we hear a lot of mixed kind of commentaries from the industry, like the European OEMs are struggling. US, there are green shoots... Green green shoots. So if you can, you know, give us some kind of, you know, commentary or color on that and how how we are stacked with respect to the auto segment. Thank you.

8:46 So what we are seeing this quarter since April is the spending pattern remains very selective, but customers continue to invest initiatives which are tied to product innovations, software defined engineering, AI automation, and cost optimization. And these are areas where ONWARD Technologies is well positioned, and where we continue to see healthy demand. From your particular point about European automotive OEMs, we are seeing a similar trend while there has been a lot of industry news about project cancellations and shutdowns. We at Onward seeing positive momentum with very select customers in very select areas where we have specialization.

9:38 So we remain quite positive about where we are with our existing customers. So is it fair to assume that we'll be having positive growth in the segment this year? Yes. We believe all... Auto is one one... Automotive is one vertical in all the technologies. But, yes, the larger mobility business, our industrial business, and our health care business are well positioned, all three verticals to grow this year. Got it. Got it. And the second question is slightly long term. It's like... I mean, just wanted to get your view and, you know, in terms of the strategy that you have.

10:25 So what gives us the confidence about win ability in this domain? Because as far as we understand, the competition seems to be really good. I mean, and the... Some of the new platform or the things that companies are trying to do, they seem to be... Even the tier one and the OEMs are also struggling. So so, you know, what gives us... What is our approach there? What is our view? You briefly mentioned and touched upon how you've been investing into, you know, digital, the stuff and, you know, building some kind of platform. But if you can give us some broad color on your strategy from medium to long term point of view, that would be helpful. Sure. So to clarify again, on the technologies, we we have 73 live customers today, and we are focusing only on those customers where we have existing master service in a medium size, there are existing client relationships, where we are working in one particular design center or office location or a factory of these customers.

11:35 Right? So we don't... We are not a sales organization chasing new customers. So our confidence is based on our conversations, our discussions with our customers. Right? So that's fundamentally... That gives us the biggest strength. There are no unknowns from that perspective. Number two, the feedback that I'm sharing with all of you today is the feedback consistently I've been sharing for the last several quarters, and I continue to maintain what we are seeing is a very healthy opportunity for a company of our size to continue to deliver robust double digit revenue and double digit EBITDA year on year. And we remain continue to focus on that. And we have selected three broad verticals, which all the three broad verticals continue to...

12:24 As I said, it's it's it's it's not gonna be that every vertical will grow every quarter. But on an annual basis, on a three year basis, we do believe all these three verticals have huge potential for us with the projections that we have shared with all of you. Oh, okay. Thank you. Thank you. That's all for me. Thank you. Ladies and gentlemen, before we take the next question, a reminder to all the participants, if you wish to ask a question, please press star and 1. We will take our next question from the line of Saiyat from Treenetra Asset Manager. Go ahead. Yeah. Hello. Good evening.

13:11 So sir, I have couple of questions. The first one, health care vertical. Could you please provide me the color on the health care vertical? Are the clients close to crossing the $1,000,000 in revenue mark? And how should we think about its contribution over the next two to three months? This is my first question. Sure. So in health care, we don't have clients yet, which has crossed $1,000,000. But in health care, we... The way I would like... The way I'm looking at health businesses grow the it can grow anywhere from, let's say, 20 to 50% year on year. It's all about execution. Q one was... This quarter, in particular, was a very good quarter for them. The team the team did a fantastic job. I think we have to maintain the momentum.

13:57 I shared last year the best part about our health care life sciences vertical is we have already won the class. We hired several people both in engineer... In delivery engineering and also in our sales team in Chicago. So I think it's all about just executing, continues to invest in the business and grow with our existing customers because when they added up, they added incumbent to challenge the current suppliers, which are all American companies. And I think the potential is massive in terms of what we can achieve with health care. Okay. And my second question is around just more than understanding regarding the ODC team that we have con... That we have recently and continue that. So given the recent OPC team and continued focus on large accounts, so how should we think about the evolution of deal sizes and the potential for more such multi year engagements going forward?

15:00 So so reinforce, again, the same point, all 70 plus customers that we have are large customers. Each of these customers have massive opportunity. Right? But I think that massive opportunity is each of them has anywhere from 100,000,000 to billion dollar outsourcing budget in the space that all the technologies offers. Right? So what we are seeing is increased opportunities across mobility, across industrial equipment, across health care, and across our software defined product engineering space. The ODC deal that we've won this quarter for 33 odd crores is only a starting point, And this is just an example of, we believe, the new several large multiyear engagements Yeah. And RFQs that we are participating in today, and then we are invited to compete.

15:54 So our pipeline today is broader and a much higher quality than a year ago. Oh, okay. Also, my my last question is on your offshore. So your offshore mix has moderately slightly this quarter. So what led to this change? And when do you expect offshore leverage to resume the margin driver? And just continuing this part, and so what EBITDA margins we are expecting for two to three, four quarters going forward? So, again, to reinforce our commitment and the projections that we have shared are the number of customers that we have with $1,000,000 plus revenue has increased this quarter.

16:45 Several customers will increase on-site, several will increase offshore, and I think it's all about timing. But year on year, you will see an improvement across all our customers because companies in US and Europe, our companies like Onward Technologies to leverage the offshore advantage. Right? That's where the real strength is. That's where the real value play for them and for us is. So you will see improvement in that part. And in terms of EBITDA, we have shared before. It will be continuously we will... We are confident that it will be double digit, and it will be... We will... It will keep improving quarter on quarter, year on year, and I think we have quite a reasonable pipeline for that. Okay.

17:30 Thank you. And good luck for the coming call. Thank you. Next question is from the line of from Counter Cycle Investments. Please go ahead. Sir, thank you for the opportunity, sir. Firstly, I wanted to understand regarding our aspiration of improving revenue per employee between 30 and 40 lakhs. So that would mean that our revenue on the base of 2,500 employees moving mostly to 752,000 crore levels. So so what kind of... For he... When is this aspiration do we expect to achieve this? And, sir, what kind of upskilling or what kind of contracts will be required to reach these levels?

18:19 Because it it seems that our employee cost is currently up to the 7075% of our revenue versus 65% for larger peers. So if you would help us understand this again. So what you are talking about is an aspiration, what the benchmark in the industry is with, let's say, the top three or five companies in the world. So that's an aspiration that we have shared. We don't have a particular timeline when we will hit that. But we have a very clear timeline timeline, which we have shared with everybody, is that we will deliver... We are confident of delivering double digit revenue and bottom line. Right? Last year was a solid year. We delivered that in the first year that we shared. Our bottom line grew substantially higher.

19:06 I think this year, our top line will be substantially higher than the 10% plus that we grew last year. We already have the order book for that, as I shared earlier. Right? At the end of the run rate, we are already at 150, which gives you the run rate of 600 crores for the year. So that's where our focus lies. Right? And as the overall numbers improve from our existing customers, I think revenue per person will increase as well. To add the last point on revenue per person, to increase the revenue from current 22 lakhs per employee that we have, let's say, 35 lakhs, I think it's only about adding more and more on-site people in US and Europe, which currently doesn't exist with the h one b program. But we do believe based on what you and me are reading, it will open up because the demand continues to be very high. The shortage of talent in US and Europe is extremely high.

19:53 But at least for companies like Onward Technologies, we are not focusing on that today like we did two, three years ago. Offshore is where customers want us to focus on. I think our team is doing a fabulous job in delivering that. The last contract that we won last quarter was, again, some of the biggest companies out there in the world. We were a new entrant, and we are very excited with that, and we similarly see similar deals coming up where we are participating, which will again improve both top line and bottom line. Got it. So so our target of achieving the high... Mid to high teens EBITDA, so so what will it require from our end to scale our EBITDA margins going forward?

20:44 Yeah. What will It requires us to and more offshore. It's it's just about mining. Right? So, like, currently, top 25 customers deliver 87% of our revenues. More and more customer engagements, we have to bid for larger projects, win larger deals, which we are doing now. More offshore, the margin improves, and that's where we will see the margin expansion happening from each of our existing customers. Each customer goes towards from 1,000,000 to 3,000,000 per year, 5,000,000 per year, $10,000,000 per year, and that's where the margin expansion will happen. Just keep in mind, the fixed cost for each client remains the same. Today, ONWARD Technologies is investing substantial capital upfront to behind these customers.

21:34 Right? So we will not need to keep investing more. Eventually, for 70 clients, we will need 70 account managers, same number of staff, same number of offices. So it's more about growing with the customers and executing and broadening our our engagement with them. Got it. Sir, if you could help us understand in our main main segment of heavy engineering and industrial, So how has been the trend of our... So you don't, like, tell what your customers are, but if you could help us understand the top five customers that we have, how has their r and d budget moved over the past three years, and how has their outsource... So for how their r and d budgets have moved over the past three years? Out of that r and d, how is the outsourcing work shifted, and how much has been awarded to Onward currently versus what it was three years back?

22:33 Sure. So just to clarify, our industrial equipment and heavy machinery segment is the oldest vertical of Onward. It's... We have been doing it for fifteen years plus, and most of our client engagements are ten year plus. Right? So we have very stable long term engagements with these customers. The difference was pre pandemic, ONWARD was only focused on the India market and the GCC business. Now we are expanding with them in the global markets, and that's where the revenue growth and the margin expansion will come. To answer your second point, these customers are all flourishing. They are doing record revenues today. They're doing record profit today, record cash generation today. And if you look at their market cap as well across North America and Europe, the industrial segment, the agricultural segment, the power generation segment, the oil segment, everything is at an all time high. So that's where... And when the revenue goes up, obviously, there are investments in technology, innovation, R and D goes up even higher. So we are outsourcing budget is very high. And with them, we are growing as well.

23:36 I... We believe the momentum will continue. The deal that we signed this quarter is an example of that. We have been supporting this customer for more than five years already, I think, four and a half years. And we saw a new customer for us today, but they've been testing us, doing pilots with us, giving us a lot of different small small opportunities to improve our capabilities. We have done that, and they invited us for the deal, and this is just one deal. Post this deal, they only invited us for several new RFQs, which are part of the same customer. Right? So it's all about executing and then bidding for larger and larger contracts with these customers. So each of these customers have outsourcing budget. They're onboarding more than, I would say, point 5% or 1% of their outsourcing budget. That's the kind of potential we're talking about.

24:24 Got it. Sure. Here's a final question from my end. Sure. So does the outsourcing budget rather than outsourcing budget, portion of r and d budget that is outsourced increases in companies that are going through a down cycle to, like, automotive OEM out of EU whose balance sheet is already stressed. So are these peers more open to outsourcing to a player like Onward or a player in industrial and heavy machinery who might be making turbines or who who might be making many equipment? He's more willing to outsource the software... ER and D work to a clear, like, Onward. If you could help us understand. Customers which are growing very quickly.

25:12 Customers that are growing exponentially, customers that are buying companies, they're doing a lot of acquisitions. That's the sweet spot. Right? Those are the companies that outsource to us more. When customers are downsizing, definitely, they look at there's an opportunity there as well, but that's not what on the technology that my team is focused on today. We are focusing on customers, which are the biggest brands, which are at the forefront of innovation, and it's all multibillion dollar companies. Got it. And, sir, have we had discussions? Because we see that this time and material contract will become less and less relevant going forward with these AI models. So have we had any discussion with our customer about how these are contracts should move going forward if you could help us on that front?

26:04 Every day. As I said, we... These are customers that we will sell it. The majority of our customers, we are working for more than ten years. The large number of engagements more than five years, and we have very few customers and new customers. So we are talking... My... Me and my team, me and my employees are talking to customers every day. Right? And so far, there's been zero conversation about time and material going away. Actually, we are seeing timing material only increase in this quarter, in q one of this year. And we see similar momentum in q two. AI is affecting IT companies, and all the technologies is not an IT company. Right? We are a product engineering company. So it makes a big difference. So as of today, we are seeing time and material increase where customers try to scale much faster.

26:50 And I think ONWARD Technologies will see the benefit of that. Okay. Sir, that was from my end. Thank you so much, and all the best. Thank you. Thank you. Next question is from the line of Omkar from KCP. Please go ahead. Onkar, your line is unmuted. You may please proceed with the question. Your line is unmuted. Since there is no response from the current participants, so we will move on to the next question. The next question is from the line of from.

27:35 Please go ahead. Thank you for the opportunity. Am I audible? Yes. Yeah. So,, in the last call, you had mentioned that you were setting up the digital AI lab in Chennai. Can you share an update on its progress, and have you started rolling out project project from there? Yes. Hi. Absolutely. Chennai office has been amazing. The center is fully operational. We have few 100 people working from there. We still have some more small capacity left. I think we should get filled very soon, and we will start looking for even bigger expansion in Chennai as of now. Our focus today for this quarter is we are opening our fourth design center in Pune. We have three offices, which are fully functional and occupied.

28:31 So we decided to open a fourth center, which is coming up in August. So our focus lies there. Once this center gets full, our focus again goes back to Chennai, which will become again a big growth focus or investment for us. Got it. And the other question is regarding the rising of fixed price mix. In the quarter, I think it was somewhere around 16%. So is this a deliberate payment or how is it? And the last from here going forward. Sorry. You're not very clear. Can you please repeat? Yeah. I was asking regarding fixed price. Next... So out of the total revenue, it was around 16% in this quarter. Right?

29:19 So was it... Sorry. Is this one off, or was this a deliberate debit and the trajectory from here? No. There's no such difference in terms of fixed price versus timing material. We have maintained that 80% plus of our revenues will be time and material. I clarified in the earlier point as well. I think what we are seeing from our customers is more and more time and material engagements. We saw that in Q1 as well. But again, it could be cyclical, it could be some projects which are fixed price, could be in this quarter. But overall, we do believe we continue to be at 80% to 90% of time and material, at least for this financial year. That's what we are learning from our customers.

30:07 80 to 90%. Understood. And regarding the 33 per hour, so we see win with the power management company. So how do you see this trend going forward? Are we seeing a strong pipeline for the power and thermal management engineering? Sorry. Can you please say the last line? Yeah. So how do we see the pipeline for power and thermal management engineering going forward? Power and thermal management? Is a very strong... Yeah. I'm talking about the 33 kilowatt that we given last month, I guess. Sure. How do I see the pipeline? Is that a question?

30:56 Yes. Yes. Okay. It's very robust. As I said, it's very strong right now because all the power management companies are focusing towards data centers. And as you know, data center business is moving. There's a huge shortage of capacity. There's a huge shortage of technical capability, and they they need very strong manufacturing engineering, getting very strong robotics, and Onward Technologies already has that. So we have the capacity and capability. Now we have to just take it to our existing customers, which are ramping up across the board. And we are already participating in a number of RFPs, and I do believe we will see significant progress and scale up in this particular area at least over the next three years.

31:47 Got it. Thank you. That's all from my side. Thank you. A reminder to all the participants, if you wish to ask a question, please press star and 1. Next question is from the line of Suresh Buramshati from Buram Financial. Sir, actually, revenue will be increasing, But profit after tax margin will not improve. In fact, further double digit revenue growth, we will guide guide to you in presentation in...

32:37 Results presentation. In future, profit of tax margin will improve the chances you get around 12% or 10%. Hello? Is that audible? Hello? Yes, sir. You're. Yes. So while PAT was lower on year on year basis, sequential performance improved significantly. Our PAT actually grew 16.9% quarter on quarter, and our EBITDA grew 20% quarter on quarter. So margins did improve 130 basis points. Our focus from a long short term and long term perspective is profitable growth and long term margin expansion, which you will see going forward.

33:30 Okay. You guide me how much you will improve this in future? Sir, we have already shared our projections. It's... We are committed, and we are working very hard to deliver double digit revenue growth and double digit margin EBITDA growth on an annual basis. And we want to remain consistent for that for the next few years, and we will deliver that as we did last year. Your line is unmuted. You may please proceed with your question. Hi. Hi. Sorry. My colleague is not there. I'm there. I can't hear.

34:29 Thank you, Onward team, for taking the questions. Actually, my couple of questions which I want to ask has been answered. First, I'll ask for the... Since I'm done on the line, I'll ask the question. So my question to management is, what is the, you know, inflection point, Jigar, and your team sees where the investment will slow down into the manpower building capabilities and building clients or acquiring talent? And when does, you know, will start something to profit? What are the what are timelines of investing? And then you'd like in terms of getting you the larger benefit. So slowing down and increasing profit margin. Is it eighteen months away, twelve months away, or you think there's no timeline? Yeah. Thanks. So our priority is not just growing revenue.

35:20 It is building a larger, higher quality, more scalable engineering engagements with our customers, right, which can deliver sustainable growth, margin improvement, and, of course, shareholder value. So we are seeing that already from last year. We went from single digit nine percent to 13% last year. You will see... You saw a huge jump in revenue this year, in this quarter. So we are already seeing that, but I think it's all about maintaining the more momentum and growing sustainable quarter on quarter going forward. Do I see there'll be a hockey stick in my business? No. I don't see that coming. I think that happens, I believe, in the product side of business. Right. In the services business, I think it's very important for Onward to maintain quarter on quarter discipline while we focus both on short term and long term.

36:08 Absolute. Okay. Thank you so much, and all the best for the future. Great great results. Thank you. Thank you. Thank you. Ladies and gentlemen, if you wish to ask a question, please press star and 1. Next question is from the line of from Pantry Cycle Investment. Please go ahead. So thank you for the opportunity once again. Sir, there is a line item in your balance sheets, subcontracting cost, which has increased by 36% y o y from 24... 25 crores to 24 crores. So what is this regarding? Are we facing employee... What... The work per employee because our subcontracting expenses are increasing on one side, and then we are we are seeing that we should improve employee per portion.

37:03 Three or four portions. Sorry. Sure. So our subcontracting cost together, if you look at from a so let me clarify two points. So first point, if you look at from a ratio perspective, our subcon cost along with our employee cost, then the ratio for FY twenty six actually has gone down to compare to FY '25. Right? So I think you're looking at transactions on a quarterly basis. I'm giving you an annual perspective. But on the second side is there are... Because of the macroeconomic conditions in terms of the war, in terms of everything happening in The Middle East, A lot of people couldn't travel for positions that we needed to hire in Europe and US. So for short term, we have hired people locally in the respective markets, which will eventually go back to backfilling with our own team members as we make progress in the year.

38:03 Got it. Once we build a project, we have to serve the customer, and that's what we have done. And I think our team has done a good job there. Got it. Sir sir, you... Sir so what I'm trying to understand is, sir, we do some kind of work for our project. Based on that, we'll get a better project or a larger project that... And that is where we would like to move. So based on the projects that we have done or capabilities that we have built with our customers over the next... Like, over the last few years... So so how... What kind of new projects are... If you can help us understand the trajectory of this... Based on the capabilities and the project work that we have done, what kind of new projects are we able to get, and what are the new capabilities that we would like to add that... And, like, if you can help the others... Us on that directionally, how they should go?

39:04 Sure. So I'll simplify it again. Like, they they are business works for us in the product engineering space, in the engineering services space. Initially, all our client engagement started on-site model, where Onward will put our best engineers working at the client side. Right? So that's in US, it brought out all their GCCs in India. After three months, six months, one year, the maturity model improves. The customer transitions all these people offshore, which will become from on-site will become offshore. That's where you have seen our offshore grow over the last five years percentage. Once the offshore team grows, let's say, it's in mechanical engineering, let's say manufacturing engineering and robotics, then that area, the customer will... We are identified as a niche supplier in that area.

39:52 All the global RFQs of that customer, whether it's coming from North America, Europe, Latin America, wherever, rooted through this one particular outsourcing office of yours, we will get a chance to participate. And then we start... Once we start winning those engagements, we can start scaling it up. Right? And each of these engagements can become 200 to 500 engineers offshore in your ODC. Right? And that's the kind of ODC that we have won. That's not the first ODC. We have several ODC that we won in the last ten years. And you've seen that if you've had a chance to visit our offices and design centers in Chennai, Hyderabad, Bangalore, and Pune. So we have multiple ODC working for multiple customers. Now it's about scaling it up. That's the that's the second part. And the third part, are building new capabilities on the digital engineering side is where we are building capabilities and where we are positioning ourselves to get an opportunity to get registered with our customers.

40:53 When we do that, whether it's embedded embedded technology systems, whether it's data analytics, whether everything to do with big data, that's where we get opportunities to start building within four other projects. And we have started doing that as well now, and we started building in last one year. And those will scale much faster as well. So that's where we see a journey where our current client engagement can go from $500,000 to $1,000,000 to $5,000,000 a year to $10,000,000 a year. But Onward has to keep investing in all the needed technologies for the customer as demanded by them. Got it. So that makes Yes, sir. So that makes sense. Sir, just one question. Sir, this 33,033 I would add one more small point. Let me add one more point just for a benefit. Right? But the the cycle changes sometimes.

41:46 And when the cycle changes, sometimes the clients are doing so well that they need everything on-site. So while cost is very important, offshore is very important, like what happened two years ago or three years ago after the pandemic, customers are demanding more offshore, but we started building on-site capacity in US and beyond. Sometimes the whole model changes as well, and we have to be very flexible, very adaptive to the customer's requirement. Then they can trust you and then they know that you can be a global partner for them for the next decade or two. Got it. Sir, there's this 33 crore contract for offshore development center. So so if you would help us understand how did we get this, like, if you can help us understand the journey with this client, what led them to get onward this? Because it's having $33,500,000 million dollar of investment from our end on these transactions. You help us understand what led the customer to give us these orders? And how should with this development center, how should the business with this customer move going forward?

42:50 Sure. I clarified earlier with the existing customer of ONWARD Technologies, with the customer we've been supporting for last four, five years. We've been supporting them across multiple geographies, across multiple areas in controls, image controls, embedded, electronics, mechanical, digital, so multiple areas we've been supporting them. They have started they have started floating. The customer is growing exponentially. Thanks to the data center boom in North America and Europe, and they have floated multiple RFPs for multiple capacity expansion. We participated in one of them, the first one, and that's the one we have one right now, which goes live. We have not even started billing yet. We will start billing from Q2. As I said, the center only goes live in August, and the full cup of full revenue will come in only in q three in terms of what we are projecting.

43:42 But this is only a start. Customer, my view and what the customer has told us, they want to grow five x. Right? And they have the budgets in place. They have, like, all the road maps in place for you to stabilize. You have to grow with them, and that's where all the technologies comes in. So so what would be the meeting them for the last five years. Got it. So so as a, what would be the scope of what... Would it be, like, probably onward doing prototyping and testing for this customer? Or... Because this is a a... So a decent amount of investment. So where will this investment go go, and what kind of work will be doing for this customer? So we are not allowed to share what kind of work we do. But on a broader side, it'll be mechanical engineering, electrical engineering, and electronics to start with. We are building capacity and capability for them to start with.

44:38 I think we'll be about forty forty engineers to start with, and then we will ramp up from there. Got it. So that is from my time NDA. Right? I hope you hope you'll appreciate that. So we don't... Not allowed to share the detailed engineering work, but we can share the broader side. This have allowed allowed us to share. Yes, sir. So that makes sense. So thank you so much and all the best. Thank you. Thank you. Participants, you may please press star and one to ask a question. As there are no further questions from the participants, I would now like to hand the conference back to the management for closing comments. Thank you again, everybody, for your questions and your continued interest in ONWARD Technologies. As we conclude today, let me again leave you with a few key costs.

45:25 Q1 was an important quarter for Onward and my team. We delivered a higher sales quarterly revenue of 151.2 crores, crossed INR 150 crore milestone for the first time, improved our EBITDA by 20% sequentially, expanded margins, increased our terms of customer base, secured a significant offshore ODC contract and successfully completed our first share buyback. These achievements reflect the strength of our strategy and the disciplined execution and the maturity our team is building has built over the last many years of investments. More importantly, we believe the quality of our business continues to improve. We are stronger today than yesterday. Our customer relationships are deepening. Our offshore delivery model is scaling and the investments we have made in digital engineering, domain expertise, engineering labs, accelerators and reusable IP are enhancing ability to compete for larger and more strategic opportunities.

46:20 These are building blocks, and we believe our best position we position us well for sustainable and long term growth. While we remain mindful of the broader macroeconomic environment, we are encouraged by the momentum we are seeing so far in the fourth month of the financial year. Our pipeline remains very healthy. Accounts are continuing to respond. Our clients are doing exceptionally well. And the whole excitement, the investments, the massive scale that we're seeing across North America and more often the data center, AI, power generation, energy sectors is a reflection of where we believe the opportunity for ONWARD Technologies will be as we continue to build more and more high end capabilities.

47:11 We crossed 150 crores in quarterly revenue, but again, our aspirations are much, much higher. Our foundations are in place. We... Our momentum is building, and we believe the most exciting phase of ONWARD Technologies is still alive there. On behalf of my entire team, thank you for your continued trust and support and partnership. We look forward to updating you on our progress in the quarters ahead. Thank you, and have a wonderful day. Thank you very much. On behalf of Go India advisers, that concludes this conference. Thank you all for joining us today, and you may now disconnect your line.