AI-generated · cited to primary sources · not investment advice
Data Pattern (543428) Aug 2025 Filing Analysis
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.”
The company hired 39 people in Q2FY26, bringing the total engineer count to 1,071. Progress is being made toward the annual hiring target. (2 in progress, 1 missed across 3 tracked commitments)
“1,080 Engineers (287 people plan to hire in FY26)”
The company is witnessing heightened urgency for indigenous equipment procurement following Operation Sindoor.
“Post the Operation Sindoor, we are witnessing heightened urgency from the government to procure and deploy indigenous defense equipment, some of which aligns well with our capabilities.”
The company is targeting a market for EW ground-based radars and other products worth over INR 25,000 crores. — target: > INR 25,000 crores
“The combined market we are trying to address in all this is more INR25,000 crores. So given the percentage of the market, I think, is substantial.”
Management is scaling the company to reach a revenue of INR 5,000 crores in the next 4 to 5 years. — target: INR 5,000 crores (+1 more commitment)
“Suppose we want, from a INR700 crores, to be a INR5,000 crores company in the next, let's say, 4 years, 5 years, we need to do not just the products.”
See the full cited Management analysis of Data Pattern
How durable is the business?
The EW segment is poised for significant growth through the 'Operation Sindoor' catalyst and the development of indigenous self-protection jammers for the SU-30 platform, targeting a potential INR 7,400 crore market. (1 expanding)
“In January of this year, government has -- MoD escalated that for some INR7,400 crores for the jammer part for the EW suite. We have the RWR.”
The company is aggressively expanding its moat by shifting from a subsystem/component vendor to a complete 'system vendor', investing INR 120 crores in new product development for radars and electronic warfare. (3 expanding)
“So the company is changing from a component and subsystem vendor to a system vendor... taking a complete shift in the way the business is done by us in the last 20 years”
Export order book is stable at approximately INR 100 crores, with management noting increased traction in international markets, particularly the U.K., though domestic remains the primary focus. (1 stable, 1 expanding)
“Our export order book remains healthy at about INR100 crores, and we're seeing increase in traction from international markets.”
The order book has grown significantly, reaching Rs 8,140 Mn, providing strong visibility for future execution. (3 expanding, 1 contracting)
“Order Book... Rs 8140 Mn (Q1FY26)”
The services segment, specifically Annual Maintenance Contracts (AMC), saw a significant temporary spike in order inflow share, though management clarifies this is not a permanent shift in the business model but a timing effect of user-level deliveries maturing. (1 shifted)
“this quarter, out of INR183 crores of order wins, majorly, we have won orders on the AMC side or services side of contracts.”
See the full cited Business Model analysis of Data Pattern
What could break the thesis?
The risk is easing as the company has already secured INR 320 Cr in new orders in Q1 and identifies a pipeline of INR 2,000 Cr to INR 3,000 Cr over the next 18-24 months. (3 easing)
“But the order pipeline of this INR1,000, INR2,000 crores we're talking about are 2 billion to 3 billion which we're talking about is all based on those kind of contracts.”
The risk is intensifying as employee costs have escalated by 27% YoY due to aggressive hiring and infrastructure building in anticipation of future contracts that have not yet been awarded. (1 intensifying)
“We need to put in the infrastructure and see the delivery model happens. So, these are all cautiously done and we are going ahead and investing in people and training. And that is how the cost is going up.”
Capex plans are proceeding with Rs 150crs planned over the next two years. While ROCE has dipped from 22% in FY23 to 18% in FY25, it remains healthy, but the execution risk of these new assets persists. (5 stable)
“Planning for additional Rs 150crs capex over next two years”
See the full cited Risk analysis of Data Pattern
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