Onward Technologies Ltd

CHAIRMAN'S ADDRESS

The world is transforming, and fast. Every aspect of our daily lives and the business world is being revolutionised by the growing prevalence of emerging technologies and their applications. Think about how AI/ML has optimised operations, from digital reengineering in manufacturing to personalised retail marketing. Consider how analytics has reshaped supply chain management, or how cloud computing is altering the way businesses operate. Healthtech, edtech and precision agriculture are empowering rural communities, while IoT is elevating urban living through smarter cities.

These technologies and many more are catalysing progress and positive change. Inevitably, the world will increasingly embrace their enormous potential to shape a better tomorrow.

India has emerged as a formidable force in the global technology landscape, particularly for its Engineering Research & Development (ER&D) outsourcing and technological expertise. Even amidst global economic uncertainties and lower tech spending, the Indian IT industry remained resilient. As per NASSCOM, the industry's revenue grew by 3.8% in FY 2023-24 to USD 254 billion with a 57-58% share in global sourcing.

The ER&D segment grew the fastest at 7.4%, AI activity expanded by a robust 2.7x, and the number of operational Global Capability Centres (GCCs) increased to more than 1,630, becoming key growth hotspots. The segments are expected to remain the driving forces in the future.

Deloitte's Technology Trends 2024 report projects India's GCC market to exceed USD 100 billion by 2030, employing more than 4.5 million people across 2,500 GCCs nationwide. In ER&D outsourcing, NASSCOM projects India's share to grow the fastest and reach 22% by 2030 from 17% in 2023. This growth, against the backdrop of a significant rise in global business

ER&D spending from USD 1.8 trillion to over USD 3.3 trillion during the same period, highlights the rapid expansion and competitive edge of India's ER&D industry.

As the global scenario stabilises, businesses will likely resume increased spending on IT modernisation and digital transformation. Emerging technology domains like AI and GenAI, IoT, blockchain, advanced robotics and the industrial metaverse are poised to continue witnessing increased adoption for their scalable and impactful outcomes. By fostering a culture of innovation and embracing emerging technologies, India will be a key player in these technology domains.

These developments are clear indicators of India's increasing ability to meet international technology demands and its growing status as a global tech talent hub for innovative solutions.

The transformational changes brought by digitalisation provide our OEM clients with an opportunity to differentiate within the industry. By reassessing operations, right from products and services to customer engagements and market strategy, they can gain a competitive edge. Success depends on swiftly transitioning to new operational landscapes, embracing digital transformation and harnessing the potential of cutting-edge technologies. Importantly, it will be about harmonising digital tools with human potential, ensuring technologies ultimately empower employees and enhance interactions and experiences for customers and the world around them.

Onward Technologies stands at the forefront of this. With our ER&D and digital service offerings that are intuitive, responsive to human needs and tailored to address evolving needs, we support our clients' journey of adaptation and innovation, enabling them to thrive in this dynamic environment.

Our edge in this transformative era is rooted in the significant investments made over the years in scaling our innovation and excellence, augmenting people skills and adding subject matter experts. This year, we reinforced our team with senior, experienced leadership. These strategic efforts position us to support our esteemed clients and partners in achieving their business objectives with transformative, human-centred technologies.

We remain steadfast in our commitment to accelerating clients' digital transformation efforts and delivering futuristic ER&D services. We will persistently invest in initiatives to deliver time-right outcomes, leverage our domain specialists' expertise, and nurture robust client partnerships.

During the year, with our enhanced capabilities, we successfully served our global clients more effectively, empowering them to stay ahead of technological trends. These efforts were greatly appreciated and yielded positive results in terms of growing recognition of our expertise and deeper relations. We also progressed in our strategic decision to exit all non-strategic clients. Our clients are global OEMs in our focussed industry verticals and service lines with large outsourcing budgets. The intent is to engage at a deeper level with these marquee clients to deliver greater outcomes.

Financial performance was equally commendable. We registered a 7.1% growth in revenues, almost entirely coming from our Industrial Equipment & Heavy Machinery, Transportation & Mobility and Healthcare verticals. The share of ER&D revenues remained strong at 63%, while digital revenues grew to 35%, highlighting our technology competence.

Our expertise and commitment to quality outcomes in connected, autonomous, shared, and electric mobility domains position us at the forefront of innovation in the industry. As a testament to our automotive engineering capabilities, renowned industry analyst, Everest Group, designated us as a Major Contender in Electric Mobility in its ACES Automotive Peak Matrix 2023 study, conducted in October 2023.

Moving ahead, our commitment to profitable and sustainable long-term growth and creating value for all stakeholders remains unwavering.

We are optimistic about the industry's immense growth opportunities. By focussing on our three core verticals and three service lines where we have domain expertise, establishing capabilities in the right technologies and engaging our global clients invested in R&D outsourcing, we are better positioned as a preferred Digital and ER&D Services outsourcing partner. This provides a significant runway for growth.

We will continue to innovate and leverage emerging technologies to move up our customer's value chain and play a greater role in their digital transformation efforts.

Our vision extends beyond business; we strive for a more equitable, inclusive and sustainable world, and believe technology can achieve this. We collaborate with clients to deliver exceptional solutions that can make meaningful differences to their customers as well as the community at large. Governance and ethical business practices are our cornerstones, upheld through industry best practices, policies, and guidance from our capable Board members.

I thank all our stakeholders for their trust in us. Together with your support, we are confident in navigating the dynamic landscape and scaling new heights of success to maximise value creation for all.

Founder & Executive Chairman