Onward Technologies Ltd. (NSE: ONWARDTEC) Q1 2026 Earnings Call dated Jul. 16, 2025
Corporate Participants:
Unidentified Speaker
Jigar Mehta — Managing Director
Jigar Mehta — Managing Director
Jigar Mehta — Managing Director
Analysts:
Unidentified Participant
Asha Gupta, — Analyst
Nitin Jain — Analyst
Aditya — Analyst
Hitaindra Pradhan — Analyst
Pratap Maliwal — Analyst
Ankur Kumar — Analyst
Amrish Kafkar — Analyst
Ishan Daga — Analyst
Pankaj Agarwal — Analyst
Questions and Answers:
operator
Ladies and Gentlemen, good day and welcome to the Onwards Technologies Q1 FY26 earnings conference call. As a reminder, all participant lines will be in listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing Star then zero on a Touchstone phone. Please note that this call is being recorded with this. I now hand the conference over to Ms. Asha Gupta, investor relations from Ernst & Young LLP. Thank you. And over to you ma’. Am. Thank you, Samya.
Asha Gupta,
Good day and welcome to Q1FY26 earnings call of Onward Technologies Limited. The results and presentations have already been mailed to you and you can also view them on our website www.onwardgroup.com. to take us through the results today and to answer your questions, we have with us Mr. Jigar Mehta, Managing Director of Onward Technologies Limited. He will start the call with a business update and financial performance for the quarter gone by which will be then followed by Q and a session as usual. I would like to remind you that anything mentioned on the call that reflects any outlook for the future or which can be construed as forward looking statements must be viewed in conjunction with the risk and uncertainties that we face.
These risks and uncertainties are included but not limited to what we have mentioned in the prospectus file with study and subsequent annual report that you can find on our website. Having said that, I will now hand over the call to Mr. Jigar Mehta. Over to you Jigar.
Jigar Mehta
Thank you Asha. Hi, good afternoon, Good evening everybody and a warm welcome to join us. To everyone who has joined us Today for our Q1 FY26 earnings call, it’s always a pleasure to speak to you and share live updates about the progress that we are making in Allmo Technologies. I hope you got a chance to go through the earnings deck and the press release that we released earlier today post the board meeting. I will go to the financials for Q1. We spoke very recently in May after Q4, so I’ll quickly update over the progress that we made last 90 days and last 60 days in particular.
Overall Q1 we made some decent progress and our revenues consolidated was at 135.6 crores and our EBITDA margin was at 12.9%. Again both is the highest that we have ever done in our history. This is something we’ve been discussing for quite some time and this is a result of both seamless execution and operational Efficiencies that we’re trying to bring in through automation in our entire business. We are continuing to invest heavily in both our target verticals, our focused large verticals which is industrial equipment, heavy machinery and the transportation and mobility vertical. And we’re also investing in our newly created healthcare vertical.
So there is no cutting cost there. It’s more about improving efficiencies and the execution model that we spoke about earlier from our availability of the whole VISA program, availability of better design centers, better capacity that we can ramp up and we are seeing a result of that. We continue to focus only on our live customers and most of our customers. I would say majority of our 95% of our customers have shown progress in this last quarter and there were a few customers which got impacted due to tariffs and some of the external micro or micro environment and these are results post that.
So obviously our internal projections shows us much better visibility and it’s all about majority of our customers moving in that direction. From a headcount perspective we continue to remain very steady. We are at about 2,570 full time employees and attrition rates are manageable. LTM is 16.5% and we continue to believe both the numbers headcount will continue to increase over the next couple of quarters. And as we get into more and more mature engagement and our global delivery model, engagement takes full cycle. In terms of geography we continue to have only two geographies as the focus primary areas.
One is North America and second is Europe and our invoicing model continues to remain the same. Everything that we invoice outside India is considered on site. Everything that we invoice in the GCC business for these global companies is in inr. As we look forward I am quite optimistic. We have good visibility going into this year from our existing order book and with the visibility that we have with new projects coming up from our existing clientele that all the three verticals should continue to build on the momentum as we continue to invest behind these verticals in US and Europe and as we keep building up more and more capability which our new design centers and the new space that we have added allows us to do.
Last a quick update on the infrastructure. We have finally moved back into our main office in Pune which is in al want of IIT park in Karadi. Completely updated and beautiful state of the art office and we would love to welcome all our investors here and we are looking forward to our new office in Chennai. This will be our largest office in the history of onboard. Our biggest design center which is opening this quarter in Q2. So again very excited with the new capacity and capability that allows us to continue to invest more behind our existing clientele, more behind growth as we continue to chart a journey towards double digit revenue and double digit ebitda.
Thank you again and I look forward to your questions and any clarifications that you may have. Over to you, Asha.
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the Touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two participants are requested to use handsets while asking a question. Ladies and gentlemen, we’ll wait for a moment while the question queue assembles. The first question is from the line of Damani from Damani family office. Please go ahead sir.
Unidentified Participant
Hello.
Unidentified Participant
Hi Jeer. Hello. Hello.
Jigar Mehta
Yes.
Unidentified Participant
Hi. Hi. A great set of congratulations. Hello.
Jigar Mehta
Thank you.
Unidentified Participant
Yes, wanted to know about your revenue growth target, FY26 and if you would like to highlight any you’ve mentioned on LinkedIn that you have hired 700 people in Chennai campus. Is this an anticipation of some new business? That and second question is regarding the EBITDA margin. Is this a sustainable considering way I can. Q2, what should we assume for the full year?
Jigar Mehta
Thanks for the questions to clarify, I’ll go to the second question first and I’ll go to the other two because they’re both related on LinkedIn. We are as I shared in my opening remarks, we’re opening a new design center which what we have mentioned and what we’re very excited. It gives us a capacity to hire a few hundred people more in Chennai which we did not have because our current design center is completely 100% occupied. So it’s anticipation for the next three years, two to three years that we will build up a bit much bigger capacity and capability taking our chennai headcount to 2,000 people going forward.
Now coming back to your first question. Our business model is about execution and it’s about seamless delivery. We’ve been trying that for the last two years and long times it’s worked. A lot of times it’s not worked. Now I believe we are in a good momentum and I think we can keep building on this. So to answer your question, we as we shared last quarter, what we’re aiming to do is deliver double digit revenue and double digit ebitda. Not on an annual basis and not get focused on the quarterly numbers but we have a very good visibility and I’m looking Forward to that in terms of wage hikes, there is a small, there will be an impact in Q2, but I think there’s still a huge opportunity for Onward based on the funnel that we see as of today, based on what we see in front of us, to continue to maintain and grow from here as well.
Unidentified Participant
And just last, just add on with that what differently what we are doing, that the growth in margins both have picked up in this what difference we Are doing,.
Jigar Mehta
What are we doing differently? We are very focused on our existing customers. That’s what we started doing. For the last several quarters there was work in progress. We had to bring in a new leadership team. We had to ensure the right customer balance, we had to ensure the right vertical balance. And most importantly, which I spoke about last year as well, one of the challenges Onward had going into last year is when our customers started asking us to build local capabilities and capacity in US and Europe, which we did not have. Now we have that, so we are able to take on projects much more confidently.
So for example, if Onward wins a project today, we can start on Monday. It could be in UK, it can be in US same time, maybe about 90 or 100 days back. We couldn’t do it right. We didn’t have the ready bench pool of resources of high quality subject matter experts who could fly for projects for project management outside India. Now we have that. So we are able to take on our sales team is able to win projects much, much more efficiently. And we believe that will momentum will sustain. We can sustain that and we can grow from here as well.
Unidentified Participant
Great. Great. Okay, thank you. Thank you.
operator
Thank you. A reminder to all participants, if you wish to register for a question, you may press star and 1. The next question is from the line of Nitin Jain from Fairview Investment Private Limited. Please go ahead.
Nitin Jain
Hello? Yes, can you hear me?
operator
Yes, you’re audible?
Nitin Jain
Yeah. So thank you for the opportunity and congratulations on a seller quarter. So I’m a new investor to the company and I’d like a few clarification on the last year’s performance. So as you can see, the PNL has been a little volatile. So FY22 was a seller here. But again FY23 saw a big impact on profitability. Again FY24 we did quite well. And then 25, the pack has gone down again. So is it possible to clarify what were the reasons behind this volatility and how we are mitigating it?
Jigar Mehta
Sure. There are multiple factors for last year. I’ll focus more on the last year. Other Numbers. I think a lot of the data is out there and Nitin, what we could do is we’ll share you a copy of our latest annual report. A lot of the data you will find there readily. But to answer last year’s point, last year we got impacted because of the two things predominantly. One was our ability to execute projects outside of Europe, outside India, which is in North America and Europe was not there. Now we are slowly building on that and we’ve invested very heavily in that in the last 18 months.
And second was the excel factors linked to the automotive sector and the supply chain where our automotive unit also got affected. Those are the two main factors for last year. And because our revenue did not grow very well, very fast or at least at 15, 20%, that impact came straight to the bottom line as well. I think a lot of those things have been corrected, at least the point number one. And I believe that will help us build on the momentum for the next three years as well as we continue to invest big behind our existing clients.
Nitin Jain
So that’s quite helpful. Thank you. And my last question is. So our dependence on one vertical, which is the initial equipment vertical, is quite high. So how are we planning to hedge our debt so that any slowdown in this vertical does not impact us too much?
Jigar Mehta
Great question. We have two verticals, industrial equipment and transportation and mobility. We don’t need to hedge. As per where I come from, in those two verticals we have a combined of 75 plus customers, 75 unique customers who are spread across the breadth and depth of North America and Europe. So even if it does impact few companies, few regions, I think there are enough other customers to go forward. I’m a big believer of having very small number of customers and we are building entire organization around that where you mean something to the customer. We can scale with existing customer and we can scale with them in all the markets the customer operates in.
And that’s where we are channelizing all onboard resources. And I think we believe we are well hedged and well balanced in terms of number of customers going forward. As I clarified before as well. I think 75 also is a very large number for my management team, for our execution team to build capacity capabilities for 75 unique products and projects. And I think 50 is a good balanced number going into the next three years. So that’s where I would like to be. That would be a nice sweet spot for onboard as we hope to aim to double up in the next few years.
Nitin Jain
Sure. And if I can just ask a follow up to that, would it be possible to clarify your order book as of 30th of June.
Jigar Mehta
So at this stage we don’t share our order book but it’s very matured and a very solid number.
Nitin Jain
So what kind of revenue visibility does it give you? Internally.
Jigar Mehta
As we shared last quarter and earlier as well, we believe we will deliver. Our goal is to deliver consistently double digit revenue growth and EBITDA growth and that’s what we’re aiming to do.
Nitin Jain
Thank you.
operator
Thank you. The next question is from the line of Aditya from Solio Investment Managers llp. Please go ahead.
Aditya
Hi Juga, thank you so much for this opportunity and I congratulations with set of numbers. So I mean building on our earlier conversations, one point which would keep coming up is like you would mention that. You know the tail is quite long. And you would like to chop off and focus more like you know on your top clients, especially the top 10 clients. But if I look at the presentation the contribution has fallen off sequentially and both on a QOQ and a YOY basis especially if you look at the contribution from top 10 clients. So any reason why?
Jigar Mehta
Interesting question. I don’t think I’ve ever said the tail is very long. What I have always said was we have been privileged to work with unique amazing world leaders or at customers and it’s not necessary or it’s hard for onboard to win all 80 battles every day in global markets. So objective is to simplify our execution model with few customers because each customer also has 2530 products and we have to build capacity and capability for that. So what I’ve always been mentioning is objectives to simplify our execution model so our delivery leadership can be focused and they can build up amazing business model for our existing customers.
I don’t have the specific answer about the top 10 customers. It could be some customer up and down could have happened over the quarter based on some project up and down. But overall most majority of our customers are seeing very good momentum in the last 90 days in Q1 of this quarter and that’s what we are seeing visibility wise as well at least going into the next few quarters.
Aditya
In terms of guidance you. I mean you’re just mentioning double digit revenue and EBITDA growth, right? Nothing beyond that.
Jigar Mehta
That’s correct. We want to be able to deliver sustainable numbers every quarter. Yes.
Aditya
So then my follow up to that would be. So what exactly has led to this margin expansion on a sequential basis? Is it like products mix change or something else which is playing out?
Jigar Mehta
It’s much more simpler. I think it’s just the execution. Right. A lot of the projects, as I always said, we used to win projects. It used to take us three months, six months to kick off the projects because we did not have the visas, we did not have the capabilities to build up the on site presence. And we’re constantly going in the market to hire very specialized project managers and architects and everything else. Today, all that rest within Onward, majority of it. And we are able to win projects. When customers sees the confidence about us able to execute projects, you get opportunity, bid for more projects and the whole cycle suddenly changes because we are talking about existing clients where we have relationship for three years, five years, in most cases, 10 plus years.
Right. So we’re able to hopefully build on that. It’s only 1/4 so far. I want to be able to deliver this for several more quarters. Then it becomes a beautiful engine for us where our customers are also extremely proud of us.
Aditya
Okay, so I mean just basically your last point. What would be then, you know, sustainable margin which we can expect in terms of a little bit.
Jigar Mehta
We’ve always maintained double digit or you know, mid teens is where we want to be. That’s where majority of our industry is who are without the manufacturing backbone. And I think that’s something Onward can easily achieve if we can keep on this momentum and you know, execute high quality projects.
Aditya
Got it. So that means the trajectory is only upwards from now on. Right.
Jigar Mehta
The focus continues to be on growth. Right. Margin is an important indicator. I understand that. But for us it’s about growing. Right. If you don’t grow, you die in our business. So we want to keep growing and that’s where all our investments and energy is going. At no point in time onward is going to be cost conscious. We’re going to be highly working efficiently. But our goal is to grow. And I think still there’s a huge opportunity for us from where we look at the business today.
Aditya
And just one follow up on the previous participants.
operator
May I request you to join the question queue? Thank you. The next question is from the line of Hitendra Pradhan from Maximal Capital. Please go ahead.
Hitaindra Pradhan
Hi sir. Thanks for the opportunity. So my question is related to like in this space, you know, hiding personal and you know, subject matter experts has been a challenge both in US and India. So how do you like that? And you think that you have teams in place going forward, you know, execute the project that you currently have.
Jigar Mehta
Hi again, great question. You know, this is onboard technology’s biggest strength in. When I took over the business from my father, our ability to attract and retain people was very high and it continues to be. And we have not seen any challenge in terms of attracting talent. As I said our challenge was more was we post the pandemic had built up an entire engine to grow in India or an offshore and then the model changed. We have to start building the model for global capacity and capability. We have started to do that over the last 18 months, put in huge money behind that.
Now we’re investing very heavily in training. So it’s all about. We already have 2,500 plus employees, right? We don’t need thousands more, we just need few more to hopefully double up and we have the customers. It’s all about execution, execution, execution. So onwards. Main goal today is continuously making sure we are investing for the future. Investing with very strong governance. Investing based on where our customers want us to be. So we are in a good spot from that perspective. And it’s all about now, as I said, execution and seamless delivery.
Hitaindra Pradhan
Okay sir, and my second question is related to the transportation vertical. So you have like, you know, you support GCC clients in the auto space and also real, you know, also domestic railway contracts. I suppose so. So there has been some commentary that you know, the automotive space, there has been some slowdown and all. So how do you see that in your case or that that doesn’t impact you that much. So any commentary on the automotive client side Ramp ups. ?
Jigar Mehta
So just a clarification there. We don’t support any automotive company in India. We have zero customers in India in any vertical. We support global automotive GCCs in India whether they’re OEMs and Tier 1s. There has been some slowdown in some customers which have been infected or impacted due to tariffs or some supply chain or some external factors. But there are several others who are actually ramping up and doing well. So overall we have seen good momentum in Q1. Let’s see how Q2 and Q3 is. Everything is very real these days. It doesn’t take two quarters for things to realize impact is immediate.
But so far we have not seen anything which we think will affect the projections that we have shared with you at least as of this morning.
Hitaindra Pradhan
Okay, thank you sir.
operator
Thank you. The next question is from the line of Pratap Maliwal from Mount Intra Finance. Please go ahead.
Pratap Maliwal
Hello. Am I audible?
operator
Yes, please go ahead.
Pratap Maliwal
Thanks for taking. Thanks for taking my question and congrats on a good set of numbers. So my question is actually related to the previous participants question. I just wanted to understand how is our demand environment Looking in our two largest portfolio because last quarter I think we pointed out that there’s been some, we’ve seen some substantial slowdown in some of our clients, particularly in the automotive tier one space. So any color going ahead, how we are seeing a demand environment shape out for us?
Jigar Mehta
Again, a very interesting question. Let me simplify our business model more for Everybody. We have 80 plus customers that are all unique customers, not linked or interrelated with each other. These are 80 companies headquartered across the breadth and depth of Europe and us. So last quarter there was last one year and last quarter in particular there was slowdown in some customers, but enough other customers were doing well. Same thing in this quarter. I think the good part is when you have 80 customers, you need about 41 to do well for us to keep making progress.
Right. And if the 41 are in the top 25 clients of Onward, you’ll make much faster progress in terms of revenue. And that’s what has happened this quarter. There’ll always be some companies which will have slowdowns. There’ll always be some quarters where customer projects getting delayed or we might lose some projects. For this we have 80 customers. And for Onward to win, if we have enough few customers which continue to grow and do well, I think we are in a very good shape to meet the projections and pipeline that we have shared with all of you.
And that’s what we are continuously betting on as we go into for the next three years, which is all about execution, execution, execution. I hope I’ve clarified your point.
Pratap Maliwal
Okay, sure, yeah. And just another question is since as I understand what you’ve been pointing out that in the past we’ve had maybe some education issues with not having the visas in place and everything, but now those are reasonably figured out. Going ahead, do we expect an increase in our on site revenues from US and Europe now that we’ve been able to build up teams in our kind of global delivery model? And should that actually change going ahead.
Jigar Mehta
That’S where we would like to be, I think one year from now I would like to see our US and Europe revenue substantially higher the onsite portion because that gives us a visibility to increase our offshore revenue substantially more in the next few quarters. Right. So any project for us being a services company starts with on site, then moves to offshore. Very unlikely that a project starts 100% offshore. So it’s onboard technologies ability for a company of our size. And the projects that we bid for is to win the projects, build the on site presence and then move offshore and then After a couple of months or quarters, weeks, months or quarters.
Based on the size of the project, the workload will go offshore. That’s where margin expansion will happen. So it’s investment initially then going to margin expansion.
Pratap Maliwal
Understood. And just to confirm, you’re not seeing any major concerns from any of the top plants where this can materially affect our projections for at least our internal projections, is that correct?
Jigar Mehta
Correct. Yes.
Pratap Maliwal
Okay. Thanks for taking my questions and I congratulation.
operator
Thank you. The next question is from the line of Ankur Kumar from Alpha Capital. Please go ahead.
Ankur Kumar
Hello sir. Thank you for taking my question and congrats for a good set of numbers. Sir, first question is I wanted to understand how much of wage hike we have taken on the 1st of July. Can you comment please?
Jigar Mehta
Hi, good evening. That process has just started so we would know by end of the month. End of July most likely. But we have already announced that Onward Technologies will be doing increment. We are not dealing or stalling it as we have seen with some of our peers. And we will be doing increment because that’s the right way forward for us.
Ankur Kumar
And generally it would be like any range you would like to comment like high single digit or look at history or how should we think on that.
Jigar Mehta
Our increment cycle is. That’s a good question again and I’m very happy to clarify. So our increment cycle is very again linked to our customers and we get good visibility from most of our majority of our customers about what the increment cycle is. It’s usually in par with what they give your own employees or maybe a percentage or 2 lower than what they are at. So based on how our global companies in US and Europe are, ours is very heavily linked to that.
Ankur Kumar
Sure, sir. And so given this wage Hike, you said Q2 will be little impacted. So given that, can we still expect that double digit margins in Q2 we should look at over whole year on that front, Sir.
Jigar Mehta
I request everybody to look at Onward from an annual perspective. There will be quarterly ups and downs. Q1 was good. Q2 looks to be good. I think we can. A lot of positive things can happen this year and next year. But Onward has to execute. So I don’t want to over promise right now from an annual perspective, I. I think we are in a very good strong shape as what we committed last quarter with the projections that we have given.
Ankur Kumar
Actually sir, the projection was double digit revenue growth for this year. But in this Q1 only we have done like 4% QQ growth. So can we expect this 3 to 4% QQ growth to continue going into the coming quarters.
Jigar Mehta
That’s not the right way to look at it. I would look at all the technologies. You can’t look at a cricket match from five overs. Right. It’s an annual thing. So look at onboard from an annual perspective and I think that will give you a very good visibility of where we think we can deliver and where. We will be
Ankur Kumar
and what it said last question would be. And in the last call you said that in this assumption of this double digit growth we are assuming auto to be flat. So are we seeing any positive turnarounds in auto or how should we look at that Sir, ?
Jigar Mehta
we have. I don’t think I said automotive will be flat. I think we’re taking very conservative projections for Automotive. I think Q1 has surprised us. Some customers were slow, some customers actually ramped up much. I shouldn’t say ramped up. We were able to execute some of the projects which were stuck in Q4 and start the projects. So so far it looks pretty positive. But automotive is an industry which is completely shaken up right now. So let’s hope that the positive news comes soon. And actually we can build on from where we are because we have very good capability and capacity as we speak today.
It’s all about a green light from our customers.
Ankur Kumar
Nice to know that. Thank you and all the best.
operator
Thank you. The next question is from the line of Ektamudra from Smartthing. Please go ahead.
Unidentified Participant
Hello, I’m audible.
operator
Yes ma’, am, you’re audible. Please go ahead.
Unidentified Participant
Basically in your last Concord reports you mentioned that the revenue growth, the long term reason of your revenue growth is 500 crore, 2000 crores. Any what the estimated tenure for that and what are the mode of the. Revenue generation increase. On that?
Jigar Mehta
Sorry, I. Can you please elaborate on the question?
Unidentified Participant
My question is that in last you mentioned that the long term reason of the revenue growth of Your company is 5,000 crore. To. What is the tenure of this and what are the modes of the revenue generation Basically?
Jigar Mehta
Let me. I hope I understood your question. I think you’re asking us how we will double up from where we are today.
Unidentified Participant
Yeah.
Jigar Mehta
Okay, thank you.
Unidentified Participant
How many years estimated in our numbers basically and what are the moods of study?
Jigar Mehta
Sorry. Okay, let’s just for time perspective. We believe we will grow double digit revenue on an annual both on a revenue basis. So in the next several years I believe we can double up. It took onward 34 years to get to 500 crores. So I am sure in the Next couple of years we can double up. So it will be a record for us. What is the mode? I’m assuming you said for execution. Again our goal is to remain the same focus on our existing customers, existing verticals and existing markets. We have a superb, we are privileged to have an outstanding board of directors.
We have great investors, we have an excellent partner in convergent pe. We have outstanding leadership team and the delivery organization continues to keep getting better and better and better every day. So I think we have everything that we need and our world class infrastructure. So now I think we have everything that we need to execute. I think it’s all about just making sure that we continue to remain focused on what is our biggest strength today and not continuously trying to do new things. And I think Q1 was a demonstration of that. Now on with technologies and me and my team have to make sure that we can consistently deliver that.
operator
Thank you. The next question is from the line of Kur Kumar Vadalia from Nivishai. Please go ahead.
Unidentified Participant
Hello. Am I audible sir?
Asha Gupta,
Yes, you’re audible sir. Please go ahead.
Unidentified Participant
Congratulations on good sets of numbers sir. My first question is which vertical do you see like in terms of growth for the next two to three years and if you can provide the vertical wise margin profile.
Jigar Mehta
Sorry we missed the first part. What is the first question
Unidentified Participant
I’m asking? Like which vertical? Like out of all three verticals which vertical do you see more on in terms of the growth like which will grow more and what is the vertical wide margin profile?
Jigar Mehta
Sure. So we don’t have a preference whether it’s the IHM or tnm. I think both the verticals have amazing again for a 500 crore revenue it’s a very small number. If you divide that by 75 customers for these two large verticals of ours there’s a huge room for us to grow in both the verticals. So where I am today I don’t have a preference. We love both the verticals. I think they will both grow. There will be some quarters, one vertical might grow, some other quarter, the other vertical might grow. So it’s a good balance from that perspective.
But there will be a time I think in the next one to three years where both the verticals start firing all cylinders and I think that will be a fun times, real exciting times in Onwards. So I’m looking forward to that and that’s what we are aiming to do. And the third vertical, Healthcare, I think that also is a beautiful vertical. It’s a vertical that we have heard, we have seen over the last five years, which is. Which continues their outsourcing budget continues to increase every year and I think we just have to get our engine right and I think we’re learning well, we’re developing, we’re correcting our mistakes and I think we keep improving and growing there as well.
So just to summarize, all the three verticals, it’s a very small number, two large verticals and one young vertical and I think all of them will hopefully continue to do well. The fun times is when all three start growing at the same day, same week, same month, same quarter.
Unidentified Participant
Also you can provide the margins for the vertical side.
Jigar Mehta
So we don’t provide that data yet, but I’m sure in the next few quarters as we keep getting matured and as you keep size increases, we will have the confidence to share that.
Unidentified Participant
Sure. And my last question is on the transportation and the mobility sides like we have serving in the North America and Europe. So like in which level of automations we are targeting the customers.
Jigar Mehta
We’ve shared that data. We have 75 customers in North America and Europe.
Unidentified Participant
I’m asking like which level of automation? Classification of the levels and automation. So which customers are segregating based on that?
Jigar Mehta
Automation?
Unidentified Participant
Yeah, automations like fully autonomous customers. We are targeting which kind of customers we are providing our services.
Jigar Mehta
So all our, all our automotive customers are the largest automotive companies in the world onward technology does not work with standalone EV suppliers and or any other startups. So we work with all the large traditional automotive companies in uk, in Germany and in US we are a preferred supplier to few. Some customers we have worked for the last five years. We only started this post the pandemic. Some customers we are working for the last three years and the several that we have just initially started the engagement in the last 12 months. So we’re at a beautiful stage with all of them.
Each of them has an EV arm and we are obviously moving towards that everywhere as well.
operator
Thank you participants. You may press Star in one to ask a question. The next question is from the line of Amrish Kafkar, an investor. Please go ahead.
Amrish Kafkar
Thank you for the opportunity and congratulations on a fantastic start. I wanted to first understand the stability of revenues going forward and understand we’re not yet ready to share order book or acv. Is it possible to share some color on what is the nature of our contracts? Are they normally call off contracts? 3, 4 months? I did longer term projects 3. I understand the mix of all of these. Is this something you could, you could provide? Is this the right way to Think about it or am I looking at it incorrectly?
Jigar Mehta
It’s a long question, but how are our contracts structured? So we don’t share as you as we don’t share ACV or tcv and neither are we allowed to share our customer names yet because we are at a very early stage with these customer engagements. We did get an approval from them even to put them in our earnings deck and our press releases. So that’s why we don’t share them. We would love to share them. That’s just the agreement that we have with our customers, our customers structured. So I simplified on what we understand very well are customer contracts that we like to bid for and we like to execute are time and material projects.
Right. So substantial portion, I believe 85% plus of our revenues could be higher this quarter as well. The last couple of quarters comes from time and material. So that’s how we are structured. We continue to have fixed price projects but what we like to do as a young company because cash flows is very important to us is to transition those fixed price projects into time and material invoicing and or billing. Otherwise what happens is you have a cash flow where you can execute a project for 18 months and there’s no cash coming in. We prefer cash flows coming in every month.
So if required we do discount that invoicing. So a customer is happy and we are happy as well. So that’s how we are structured with our customers and that’s how I see it going forward as well for the next two, three years.
Amrish Kafkar
Thanks for that. I think that’s helpful. I’m trying to also get a sense of the team and the timing material projects that we work on. Are these typically, you know, two months, three months commitments or can they be longer? Is there any color on this?
Jigar Mehta
So the vision here is to be an extension of a client R and D department. So when the client has a design center in us, in California, in Europe or India, GCC in India onward, we are happy staffing the client centers. So customer needs them on site, we’re very happy to get them on site, customer needs them offshore, then we do it from our offices and customer wants it from some third location, we do that as well. So all three business models that we and I think every other engineering company does, so there’s no differentiation from that perspective and that’s what we do as well.
So all these projects, or all these projects, all these RFQs are onboard bids for and wins are all long term rollover. Usually it’s every six months, every 12 months or sometimes every two years as well. So there’s no project one, two months, three months, six months, that doesn’t happen in our industry. At least.
Amrish Kafkar
That’S helpful. Thank you. Second question is on headcount, we’ve had a slight reduction between Q on Q but still an increase in total revenue. Is this just a one off? I mean, even if you look at it year on year, we can see revenue per headcount is increasing by nearly 10%. You mentioned the efficiency and automation going into the business. Is this something we should see going forward or is it a one off this quarter that for some reason the headcount has dropped?
Jigar Mehta
No, again, very good question, good observation. If you look at onward three years ago or four years ago, when we were 250 crores, we had the same headcount. So objective because majority of our business that time was in India, headcount continues to remain around the 2500 number because we are focusing more and more on the US and Europe market. So it’s not a one off, it’s something that we are consciously working towards and improving. And I think there’s still some headway left for us to, for us to go from 500 to let’s say 1000 crores, Onward doesn’t need to add 2500 people.
I think there will still get, there’s a lot of efficiency left in our current 2500 headcount as well, where at least hopefully another 100, 200, 300 people can move on site then, which will increase the offshore headcount substantially.
Amrish Kafkar
Thanks for that, very helpful and wish you all the best for the remainder of the year. Thank you.
operator
Thank you. The next question is from the line of Ishan Daga from Dhanvester. Please go ahead.
Ishan Daga
Thanks for the opportunity and congratulations on a very good set of numbers My first question is that we have agreed.
operator
sounding very low.
Ishan Daga
Yeah. Am I audible now?
operator
Yes, yes, you are audible now, sir. Yeah, go ahead.
Ishan Daga
So my first question is that since we have executed our strategy to mine existing clients and reducing the total number of clients, but that brings in a risk of client concentration with itself. So how we are catering to that risk and how we are safeguarding our clients from the competition figure.
Jigar Mehta
So interesting question. Thanks for that. I don’t think there’s a risk factor there. If you look at the top five engineering companies, I think they have three customers or four or five max, which contributes 90% of their revenue. I don’t think there’s any company which is bigger than us, which has much larger Customer base, they might have a tail, but five customers must be contributing 90% plus revenue. So I think Onward is because we came from a very different environment in the last couple of earlier decades. Our ability to get large number of customers or relationships that we had was very easy.
Now we have a. I think we. Have a good balance now. So I think it’s more about, as I said, building right capacity capability for our customers. Customers have to see value in what we do and they’re seeing our ability to continuously invest ahead of what they want us to be. And I think that’s where the real challenge and the real game changer for ONWARD will be for the next three years.
Ishan Daga
And my next question is on utilization rates. Since we are having same number of employees from last couple of years and the revenues were stagnant for last say couple of years also. So how the utilization rate has turned out.
Jigar Mehta
Very positive. It’s been a good momentum. I think Q4 was very good for us. We had a huge uptick in Q4 starting February which I shared in the last call. And I think that momentum continues to getting built. And I think it’s all about, as I said, us and our ability which we are getting better at every day to execute for our customers.
Ishan Daga
Okay. Any trend wise, if you can explain in numbers how the utilizations have moved out in last couple of years that would be helpful.
Jigar Mehta
So we don’t share that data yet but I think the numbers are very easy for you to calculate.
Ishan Daga
Okay.
Jigar Mehta
Knowing our headcount and revenue per person as the earlier gentleman mentioned.
Ishan Daga
Yes. I am tracking this company since last few years and we are met in Mumbai also Zigar and very happy to. See the progress which we have made. So what is the how we are seeing onwards say after three or five years, what is the mission and what kind of revenues? Thousand crores. You are saying in couple of years you will be targeting that kind of revenue. So where do we see in three years say onwards
Jigar Mehta
where we. Three years again I shared that last quarter where I will be very happy. We can deliver three years in a row double digit revenue growth and double digit EBITDA growth. Right. As far as we do that, I think that will be definitely a dream. If somebody offers that today, I will take it.
Ishan Daga
Okay, sure. Thanks for the opportunity and all the very best for the near future. Thank you.
Jigar Mehta
Thank you.
operator
Thank you. Our next follow up questions come from the line of Uncle Kumar from Alpha Capital. Please go ahead.
Ankur Kumar
Thank you. For the production on this employee account, I wanted to understand what is our Plan for this year. How much are we looking to add? How are we thinking on that front Sir,?
Jigar Mehta
I think we have a very good headcount, very balanced headcount where we are today. We still have a lot of view, a lot of room as I shared earlier, to still improve where as I said, we’ve invested in a lot of things in the last six, seven quarters. Six quarters, I think. So there’s still a lot of room there. But in our internal projections, I think by March 31st we should be approximately at 2700 people. That’s our internal projections. 27 plus minus based on which projects pick up when it can be close to 3,000 as well.
It can be close to where we are. 2700 is a good average of how we are budgeting internally.
Ankur Kumar
Got it. And sir, on client side we see clients with annual billing greater than 1 million USD that has increased this quarter. So are we looking at how things are moving on that trend.
Jigar Mehta
Again? It’s been a nice positive, progressive momentum. All 80 clients should be there. I don’t think it’s only that number. All clients have the potential and the pipeline. We have one of our $1 million clients becoming 3 million as well and 3 million becoming higher. But the objective is yes, every client onboard hash should have that kind of potential and or should have that kind of revenues going forward. And that’s what we are working towards. That’s why simplifying the execution model, simplifying the market size that we focus on, which is from our existing clients I think is the right way forward for us.
Ankur Kumar
Sure. Thank you. And all this.
Jigar Mehta
Thank you.
operator
Thank you. The next question comes from the line of Panka Ch Agarwal, an investor. Please go ahead.
Pankaj Agarwal
Hi, good evening. Thanks for the opportunity and congratulations on good set of numbers. I would like to ask questions regarding more color that you can give on the product innovation with the point of view of artificial intelligence, whether it is coming as a facilitator or still we are in the process of developing some products around it.
Jigar Mehta
Thanks for the question. Just to clarify again, onboard does not invest in product development. We are 100% pure play services organization. So for us even innovation starts after we win the client project. So very unlikely that we would start before we would do POCs before. But that’s again most likely highly majority of times paid by the client. So again just to clarify, we do not do product development and that’s not The business we are in..
Pankaj Agarwal
Okay. And just a follow up question. Do we have any like let’s say three years five years or seven years down the line into AI based product development to integrate with our services.
Jigar Mehta
Again, very interesting point. It’s too early for me to comment, but I’m not seeing that. It’s not something our customers are asking us to do yet. We are a highly customer focused organization. That’s what we are trying to get to more and more every day. So if our customers ask us to get into that, that’s something we will look at very seriously. And if it’s economically viable, we would definitely do that. But that’s not something we have heard of yet from our customers.
Pankaj Agarwal
Sure, Katya, Thanks.
operator
As there are no further questions, I would now like to hand the conference over to Mr. Digar Mehta for closing comments.
Jigar Mehta
Thank you. Thank you everybody for again joining this evening. It was a pleasure to address all of your questions and clarifications. If there’s any additional data you have, please reach out to our IR managers at ENY and we’ll be very happy to address them. Thank you again and have a lovely evening.
operator
On behalf of Onward Technologies Ltd. That concludes this conference. Thank you all for joining us and you may now disconnect your line.