Onward Technologies Ltd. — Earnings Release 2022

May 14, 2022

Q4-FY22/FY22 EARNINGS PRESENTATION May 2022

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W H O W E A R E

Onward Technologies is a technology outsourcing company specializing in digital and ER&D services. We help global OEMs improve speed to market, accelerate innovation, and maximize returns on their R&D investments.

2

Value proposition of onward tech

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Revenue (INR Mn) & EBITDA Margin (%)
3,073
2,610 2,715
2,404
6.96%
8.58%
8.58% 7.20%
FY19 FY20 FY21 FY22
FY22 Segmental Revenue
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The Power of One

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Digital play across all lines of business

• 2800+ employees

• Digital engineering and outsourcing

• • Electronics and Embedded

• 14 offices across 6 countries

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• Proven expertise in operating as extension of R&D teams of global OEMs

• Mechanical Engineering

• IT services

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2 Focused industry verticals

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• Transportation & Mobility

Global 2000 customers

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Industrial Equipment & Heavy Machinery Digital 8%
Diversification and investment in 2 high-
ITS,
growth verticals: Healthcare & MedTech, 21%
Hi-Tech
ER&D,
71%
Strong financial turnaround FY22 Segmental Revenue
• Net debt-free, sound balance sheet & Healthcare 7%
cash reserves
• 3-year PAT CAGR at 33% Others 19%
• 6-year track-record of consistent
dividend payout Industrial
Equipment &
Transportaion &
Heavy Machinery
Mobility
44%
30%
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• Industrial Equipment & Heavy Machinery

• Diversification and investment in 2 highgrowth verticals: Healthcare & MedTech, Hi-Tech

• 6 of global top-10 automotive companies

• 5 of global top-8 heavy machinery companies

• Strong customer base and relationships to fuel double digit growth in top line

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Geared for double-digit growth

• Focused on growing existing top-25 OEM accounts

• Margin expansion through India advantage (talent pyramid, costs)

• Capacity expanded in US, EU, UK, India in FY 22, in response to customer demand

3

Our capabilities

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• Lines of business Focus verticals

• Mechanical

• Digital • New Product

• §Digital with Design & AR/VR Embedded Development IT §AutomationEngineering • Platform Services - •Engineering Value •Maintenance SW Development & §Big Data •Hardware, Software Connectivity •Simulation Virtual • Enterprise Business Analytics Solutions Applications §Cloud & DevOps • Product Sustenance • Manufacturing • Data Management §AI/ML & Modernization Engineering & Reporting • After Market • Technical • Testing & QA Publication Services

• Support

• • Verification & • Enterprise Validation Managed Services

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44

Strategic presence across geographies

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1 D e t r o i t , M I
2 C l e v e l a n d , O H
3 C h i c a g o , I L
5 6
1 4 T o r o n t o , O N
7
4 5 L o n d o n , U K
6 F r a n k f u r t , D E
3
2 8 12 7 A m s t e r d a m , N L
M u m b a i , I N
8
10 ( C o r p o r a t e H Q )
9
11 9 P u n e ( 3 C O E s * )
10
C h e n n a i , I N
11
B e n g a l u r u , I N
12 H y d e r a b a d , I N
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*COE: Centre of excellence

Q4-FY22/FY22 FINANCIAL OVERVIEW

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Q4-FY22/FY22 Key financial highlights

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Q4-FY22 Consolidated Financial Performance Q4-FY22 Standalone Financial Performance
INR 875 Mn INR 63 Mn 7.20% INR 665 Mn INR 67 Mn 10.08%
Revenue from Revenue from
EBITDA EBITDA Margins EBITDA EBITDA Margins
Operations Operations
INR 32 Mn 3.66% INR 1.42/Share INR 39 Mn 5.86% INR 1.72/Share
PAT PAT Margins Diluted EPS PAT PAT Margins Diluted EPS
FY22 Consolidated Financial Performance FY22 Standalone Financial Performance
INR 3,073 Mn INR 214 Mn 6.96% INR 2,344 Mn INR 176 Mn 7.51%
Revenue from Revenue from
EBITDA EBITDA Margins EBITDA EBITDA Margins
Operations Operations
INR 237 Mn 7.71% INR 12.17/Share INR 93 Mn 3.97% INR 4.79/Share
PAT PAT Margins Diluted EPS PAT PAT Margins Diluted EPS
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Q4-FY22/FY22 Operational Highlights

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• Company recorded highest revenue growth in Q4-FY22 of 13% QoQ to INR 875Mn.

• Revenue growth was driven by increase in revenues from strategic clients in Industrial Equipment, Heavy Machinery, Transportation & Mobility verticals.

• 11 clients now deliver $1 million or more in revenues on annualized basis.

• Credit rating has been upgraded by ICRA to BBB for long term and A3+ for short term.

• Addition of 160 employees during the quarter taking the total global headcount to 2641.

• Expansion of Center of Excellence (COE) in OMR, Chennai to 500 seats, to build capabilities in Digital Process Automation & Mechanical Product Engineering.

• Additionally, COE in Bengaluru was expanded to build capabilities in Embedded/ Electronics for mobility clients.

• The company also opened a new design center in Hyderabad to grow its Digital DevOps & Cloud practices.

8

Management comments

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Commenting on the performance of the Company, Jigar Mehta – Managing Director said:

“As our client’s progress on their transformation journey with a renewed urgency, we see strong demand for digital and ER&D services from all the large global OEM clients. We were very pleased to deliver record 28% annual revenue growth & 225% PAT growth from previous financial year, which surpassed all our internal projections.

Last year has been a historic year for our team in all growth parameters and we remain positive about the opportunities in front of us going forward. Our international business grew 28%+ and our domestic Indian business grew at a similar rate of 27%. We have invested in a talent acceleration program across all the centers in India increasing the capacity by 200 engineers as on March 2022. We continue to hire SMEs with strong domain experience across Digital and Embedded SW domains across all our design centers in India to meet the growing demand from USA & European customers. We believe these investments will help us continue to grow at a record pace over the next few quarters.”

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Consolidated Quarterly Financial Performance

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Particulars (INR Mn)	Q4-FY22	Q4-FY21	Y-O-Y	Q3-FY22	Q-O-Q
Operational Income	875	663	32.0%	773	13.2%
Total Expenses	812	625	30.0%	676	20.1%
EBITDA	63	38	65.8%	97	(35.0)%
EBITDA Margins (%)	7.20%	5.73%	147 Bps	12.55%	(535) Bps
Other Income	16	20	(20.0)%	3	NA
Depreciation	27	25	8.0%	25	8.0%
Finance Costs	3	4	(25.0)%	2	50.0%
PBT	49	29	69.0%	73	(32.9)%
Tax	17	8	NA	23	(26.1)%
Profit After tax	32	21	52.4%	50	(36.0)%
PAT Margins (%)	3.66%	3.17%	49 Bps	6.47%	(281) Bps
Other Comprehensive Income	(7)	3	NA	-	NA
Total Comprehensive Income	25	24	4.2%	50	(50.0)%
Diluted EPS (INR)	1.42	1.27	11.8%	2.52	(43.7)%

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Consolidated Annual Financial Performance

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Particulars (INR Mn)	FY22	FY21*	Y-O-Y
Operational Income	3,073	2,404	27.8%
Total Expenses	2,859	2,230	28.2%
EBITDA	214	172	24.4%
EBITDA Margins (%)	6.96%	7.15%	(19) Bps
Other Income	215	53	NA
Depreciation	101	104	(2.9)%
Finance Costs	10	23	(56.5)%
PBT	318	98	NA
Tax	81	25	NA
Profit After tax	237	73	NA
PAT Margins (%)	7.71%	3.04%	467 Bps
Other Comprehensive Income	(7)	(3)	NA
Total Comprehensive Income	230	70	NA
Diluted EPS (INR)	12.17	4.35	NA

• FY21 numbers have been restated after inclusion of Onward eServices Ltd, a wholly owned subsidiary, which has been merged with Onward Technologies Ltd as on March 25, 2021.

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Standalone Quarterly Financial Performance

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Particulars (INR Mn)	Q4-FY22	Q4-FY21	Y-O-Y	Q3-FY22	Q-O-Q
Operational Income	665	497	33.8%	596	11.6%
Total Expenses	598	456	31.1%	540	10.7%
EBITDA	67	41	63.4%	56	19.6%
EBITDA Margins (%)	10.08%	8.25%	183 Bps	9.40%	68 Bps
Other Income	19	25	(24.0)%	8	NA
Depreciation	26	22	18.2%	22	18.2%
Finance Costs	3	4	(25.0)%	3	NA
PBT	57	40	42.5%	39	46.2%
Tax	18	11	63.6%	10	80.0%
Profit After tax	39	29	34.5%	29	34.5%
PAT Margins (%)	5.86%	5.84%	2 Bps	4.87%	99 Bps
Other Comprehensive Income	(4)	1	NA	-	NA
Total Comprehensive Income	35	30	16.7%	29	20.7%
Diluted EPS (INR)	1.72	1.75	(1.7)%	1.48	16.2%

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Standalone Annual Financial Performance

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Particulars (INR Mn)	FY22	FY21*	Y-O-Y
Operational Income	2,344	1,727	35.7%
Total Expenses	2,168	1,531	41.6%
EBITDA	176	196	(10.2)%
EBITDA Margins (%)	7.51%	11.35%	(384) Bps
Other Income	56	85	(34.1)%
Depreciation	92	93	(1.1)%
Finance Costs	10	21	(52.4)%
PBT	130	167	(22.2)%
Tax	37	40	(7.5)%
Profit After tax	93	127	(26.8)%
PAT Margins (%)	3.97%	7.35%	(338) Bps
Other Comprehensive Income	(5)	1	NA
Total Comprehensive Income	88	128	(31.3)%
Diluted EPS (INR)	4.79	7.50	(36.1)%

• FY21 numbers have been restated after inclusion of Onward eServices Ltd, a wholly owned subsidiary, which has been merged with Onward Technologies Ltd as on March 25, 2021.

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HISTORICAL FINANCIAL OVERVIEW

14

Historical Consolidated Profit & Loss

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Particulars (INR Mn)	FY19	FY20*	FY21*	FY22
Operational Income	2,610	2,715	2,404	3,073
Total Expenses	2,386	2,482	2,230	2,859
EBITDA	224	233	172	214
EBITDA Margins (%)	8.58%	8.58%	7.15%	6.96%
Other Income	12	11	53	215
Depreciation	57	113	104	101
Finance Costs	27	35	23	10
PBT	152	96	98	318
Tax	51	34	25	81
Profit After tax	101	62	73	237
PAT Margins (%)	3.87%	2.28%	3.04%	7.71%
Other Comprehensive Income	8	19	(3)	(7)
Total Comprehensive Income	109	81	70	230
Diluted EPS (INR)	6.17	3.76	4.35	12.17

• FY20 and FY21 numbers have been restated after inclusion of Onward eServices Ltd, a wholly owned subsidiary, which has been merged with Onward Technologies Ltd as on March 25, 2021.

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Historical Consolidated Balance Sheet

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Particulars(INR Mn)	FY20	FY21	FY22	Particulars(INR Mn)	FY20	FY21	FY22
ASSETS				EQUITY AND LIABILITIES
Non-Current Assets				Equity
Property, Plant & Equipment	80	171	366	Share Capital	160	163	220
Intangible assets	41	39	26	Other Equity	520	581	1,412
Intangible assets under	-	1	-	Total Equity	680	744	1,632
development				Non Current Liabilities
Right of use asset	159	88	175	(i) Borrowings	-	6	5
Financial Assets				(ii) Lease liabilities	109	55	109
(i) Loans	30	31	28	Provisions	25	48	34
Deferred tax assets	28	33	28	Deferred tax liabilities	7	-	32
Income tax assets (net) Other non-current assets	193 2	111 -	179 11	Sub Total Non Current Liabilities	141	109	180
Sub Total Non Current Assets	533	474	813	Current Liabilities
Current Assets				(i) Borrowings	181	146	1
Financial Assets				(ii) Trade Payables	76	72	115
(i) Investment	-	1	-	(iii) Other Financial Liabilities	133	151	203
(ii) Trade Receivables	498	408	666	(iv) Lease Liabilities	57	43	72
(iii) Cash & cash equivalents	178	285	495	Provisions	21	14	15
(iv) Bank balance other than above	44	9	109	Income tax liabilities	5	-	-
(v) Contract assets (vi) Other financial assets Other Current Assets Sub Total Current Assets	42 1 65 828	134 1 64 902	119 4 88 1,481	Contract liabilities Other current liabilities Sub Total Current Liabilities Sub Total Liabilities	5 62 540 681	30 67 523 632	16 60 482 662
TOTAL ASSETS	1,361	1,376	2,294	TOTAL EQUITY AND LIABILITIES	1,361	1,376	2,294

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Historical Standalone Profit & Loss

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Particulars (INR Mn)	FY19	FY20*	FY21*	FY22
Operational Income	1,182	1,806	1,727	2,344
Total Expenses	1,032	1,660	1,531	2,168
EBITDA	150	145	196	176
EBITDA Margins (%)	12.69%	8.03%	11.35%	7.51%
Other Income	50	65	85	56
Depreciation	48	102	93	92
Finance Costs	21	33	21	10
PBT	131	75	167	130
Tax	37	21	40	37
Profit After tax	94	54	127	93
PAT Margins (%)	7.95%	2.99%	7.35%	3.97%
Other Comprehensive Income	(4)	3	1	(5)
Total Comprehensive Income	90	57	128	88
Diluted EPS (INR)	5.70	3.26	7.50	4.79

• FY20 and FY21 numbers have been restated after inclusion of Onward eServices Ltd, a wholly owned subsidiary, which has been merged with Onward Technologies Ltd as on March 25, 2021.

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Historical Standalone Balance Sheet

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Particulars(INR Mn)	FY20	FY21	FY22	Particulars (INR Mn)	FY20	FY21	FY22
ASSETS				EQUITY AND LIABILITIES
Non-Current Assets				Equity
Property, Plant & Equipment	70	164	184	Share Capital	160	163	220
Intangible assets Intangible assets under development Right of use asset	41 - 146	39 1 83	26 - 171	Other Equity Total Equity	455 615	573 736	1,262 1,482
Financial Assets				Non Current Liabilities
(i) Investments	121	121	320	(i) Borrowings	-	6	5
(ii) Loans	29	-	-	(ii) Lease liabilities	104	55	113
(iii) Other Financial Assets Deferred tax assets	27	28 23	30 21	Employee benefit obligations	25	46	34
Income tax assets (net)	193	111	176	Sub Total Non Current Liabilities	129	107	152
Other non-current assets	1	-	12	Current Liabilities
Sub Total Non Current Assets	628	570	940	(i) Borrowings	68	-	1
Current Assets				(ii) Trade Payables	96	78	97
Financial Assets (i) Investments (ii) Trade Receivables	339	1 283	- 464	(iii) Other Financial Liabilities (iv) Lease Liabilities	92 48	126 38	178 64
(iii) Cash & cash equivalents	75	119	395	Provisions	20	11	11
(iv) Bank balance other than above	42	10	108	Contract liabilities	58	28	103
(v) Contract assets	32	127	146	Other current liabilities	52	48	56
(vi) Other financial assets Other Current Assets	3 58	2 61	8 83	Sub Total Current Liabilities	434	329	510
Sub Total Current Assets	549	602	1,204	Sub Total Liabilities	563	436	662
TOTAL ASSETS	1,178	1,172	2,144	TOTAL EQUITY and LIABILITIES	1,178	1,172	2,144

Consolidated Financial Highlights

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Revenue (INR Mn)

EBITDA (INR Mn) & EBITDA Margin (%)

PAT (INR Mn) & PAT Margin (%)

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237
3,073
2,610 2,715 224 233 214
2,404
172
8.58% 8.58%
101
7.15% 6.96% 62 73 7.71%
3.87%
3.04%
2.28%
FY19 FY20 FY21 FY22 FY19 FY20 FY21 FY22 FY19 FY20 FY21 FY22
EBITDA EBITDA Margin PAT PAT Margin
Net D/E (x) DSO Days ROE and ROCE (%)
86.99
0.18
27.36%
73.97 75.53 73.78
67.43
18.10%
15.97%
14.22%
(0.19)
(0.06) 62.96
(0.30) 62.20 16.61%
56.86 14.52%
9.16% 9.85%
FY19 FY20 FY21 FY22
FY19 FY20 FY21 FY22 FY19 FY20 FY21 FY22
DSO with Unbilled in Days Billed DSO in Days RoE (%) RoCE (%)
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Revenue Metrics (Consolidated)

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Revenue by Business (%)
2% 8%
31% 27% 26% 21%
69% 73% 72% 71%
FY19 FY20 FY21 FY22
ER&D ITS Digital
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Revenue by Contract Type (%)

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26% 22% 25% 26%
74% 78% 75% 74%
FY19 FY20 FY21 FY22
Time and Material Fixed Time, Fixed Price
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Revenue by Industry (%)
4% 5% 8% 7%
34% 27% 26% 19%
30%
26% 24%
26%
42% 42% 44%
36%
FY19 FY20 FY21 FY22
Industrial & Heavy Machinery Transportation & Mobility
Others Healthcare
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Revenue by Engagement Model (%)

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30% 32% 30% 30%
70% 68% 70% 70%
FY19 FY20 FY21 FY22
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Onsite Offshore

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Hedging & Other Metrics

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Other Ratios	FY19	FY20	FY21	Q4-FY22
Carpet Area	70,873	71,948	65,285	87,576
Number of seats	889	906	847	1,200
PBT to Revenue%	5.82%	3.55%	4.08%	10.35%
Number of active clients	199	210	184	145
Hedging Details for Q4-FY22*	Hedge Rate	Hedge Amount (Mn)	Actual Rate Achieved	Gain Over 50% Hedge rate (INR, Lakh)
USD	75.92	1.93	76.23	5.43
EUR	88.35	0.46	88.27	(0.15)
GBP	103.21	0.47	104.14	1.90

*The performance is benchmarked against a 50% hedge rate - average of Day 1 forward rate and spot on maturity/current MTM for outstanding exposure.

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Capital Market Data

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Stock Market Performance (as on 31st March, 2022) Dividend per Share (INR)
250%
200%
3.00
150%
3.00
100%
50% 1.50 1.50
0%
-50%
Apr-21 May-21 Jun-21 Jul-21 Aug-21 Sep-21 Oct-21 Nov-21 Dec-21 Jan-22 Feb-22 Mar-22
Onward Sensex FY19 FY20 FY21 FY22
Price Data (As of 31st March 2022) Shareholding Pattern (as on 31st March, 2022)
Face Value 10.0 AIF
0.54%
Market Price 360.3
52 Week H/L 406.0/104.5
Market Cap (INR Mn) 7,934.1 Public Promoters
53.27% 45.97%
Equity Shares Outstanding (Mn) 22
1 Year Avg. Trading Volume ('000) 95.3
FII
1 Year Avg. Net Turnover (Mn) 20.9
0.22%
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Disclaimer

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Onward Technologies Limited

No representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness, or correctness of the information or opinions contained in this presentation. Such information and opinions are in all events not current after the date of this presentation. Certain statements made in this presentation may not be based on historical information or facts and may be "forward-looking statements" based on the currently held beliefs and assumptions of the management of Onward Technologies Limited, which are expressed in good faith and in their opinion reasonable, including those relating to the Company’s general business plans and strategy, its future financial condition and growth prospects and future developments in its industry and its competitive and regulatory environment.

Forward-looking statements involve known and unknown risks, uncertainties, and other factors, which may cause the actual results, financial condition, performance, or achievements of the Company or industry results to differ materially from the results, financial condition, performance, or achievements expressed or implied by such forward-looking statements, including future changes or developments in the Company’s business, its competitive environment, and political, economic, legal and social conditions. Further, past performance is not necessarily indicative of future results. Given these risks, uncertainties, and other factors, viewers of this presentation are cautioned not to place undue reliance on these forward-looking statements. The Company disclaims any obligation to update these forward-looking statements to reflect future events or developments.

This presentation is for general information purposes only, without regard to any specific objectives, financial situations, or informational needs of any particular person. This presentation does not constitute an offer or invitation to purchase or subscribe for any securities in any jurisdiction, including the United States. No part of it should form the basis of or be relied upon in connection with any investment decision or any contract or commitment to purchase or subscribe for any securities. None of our securities may be offered or sold in the United States, without registration under the U.S. Securities Act of 1933, as amended, or pursuant to an exemption from registration therefrom.

This presentation is confidential and may not be copied or disseminated, in whole or in part, and any manner.

Valorem Advisors Disclaimer:

Valorem Advisors is an Independent Investor Relations Management Service company. This Presentation has been prepared by Valorem Advisors based on information and data which the Company considers reliable, but Valorem Advisors and the Company makes no representation or warranty, express or implied, whatsoever, and no reliance shall be placed on, the truth, accuracy, completeness, fairness, and reasonableness of the contents of this Presentation. This Presentation may not be all-inclusive and may not contain all of the information that you may consider material. Any liability in respect of the contents of, or any omission from, this Presentation is expressly excluded.

Valorem Advisors also hereby certifies that the directors or employees of Valorem Advisors do not own any stock in personal or company capacity of the Company under review.

For further details, please feel free to contact our Investor Relations Representatives:

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Mr. Anuj Sonpal Valorem Advisors Tel: +91-22-4903 9500 Email: onward@valoremadvisors.com

23

THANK YOU