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Data Pattern
Our verdict on Data Pattern isn’t the consensus take — see where we landed, and the one risk the bull case glosses over.
See the verdict — free →Does management do what it says?
Data Patterns significantly exceeded its FY26 targets, achieving 30.6% revenue growth and 40.1% EBITDA margins. (1 exceeded, 3 met, 1 in progress across 5 tracked commitments)
“One large order, INR180 crores, we expect to execute this quarter or next quarter.”
In Q3FY26 alone, the company received order inflows of Rs 2,428 Mn (approx. Rs 243 Cr). Management now expects an additional Rs 500 Cr in the remaining part of the year (Q4), indicating progress toward the H2 target. (1 in progress, 1 exceeded across 2 tracked commitments)
“Strong Order Book in Pipeline at Rs 20-30bn over next 18-24 months”
See the full cited Management analysis of Data Pattern
How durable is the business?
The company is strengthening its moat by transitioning from a subsystem supplier to a full systems and solution provider, leveraging in-house IP to maintain high EBITDA margins (44%). (1 expanding)
“Moving up the Value Chain through building Full Systems : Using reusable building blocks... designed in-house with IP”
The company is transitioning from a subsystem supplier to a full systems integrator, specifically in EW and Radar, which is driving significant revenue growth despite short-term margin dilution from a large strategic project. (4 expanding)
“Our order book stands at an all-time high of ~₹2,062 crores, the highest in the Company’s history, providing strong revenue visibility over the coming years.”
See the full cited Business Model analysis of Data Pattern
Where does growth come from?
The shift toward high-volume production is accelerating. Production revenue share reached 76% in Q1 FY26, significantly higher than the 53% average in FY25. (2 accelerating, 1 new trend across 3 signals)
“Continuing the product development to build full systems to address larger TAM.”
The company is accelerating its capital expenditure, planning to spend Rs 150 cr in the next two years, nearly matching the total spent over the previous five years (Rs 160 cr). (5 accelerating across 5 signals, 1 leading indicator)
“Production FY25 53% FY26 58%”
See the full cited Future Growth analysis of Data Pattern
What could break the thesis?
Debtor days have increased slightly to 307 days in FY25 from 280 days in FY24, indicating worsening collection efficiency from government agencies. (2 intensifying, 3 easing, 1 high-severity)
“Cash Conversion Cycle (Days) ... FY26 365”
Debtor days have worsened, increasing from 280 days in FY24 to 307 days in FY25. This indicates that the time taken to collect payments from government agencies is lengthening, further tying up capital. (1 intensifying, 2 easing, 2 stable, 1 high-severity)
“Customers: DRDO 28.7%, Brahmos 31.5%”
See the full cited Risk analysis of Data Pattern
Read the full thesis on Data Pattern
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