Data Patterns (India) Limited (DATAPATTNS) AI Stock Analysis

• Market Cap: ₹179.38B
• Dividend Yield: 0.3%
• Average Volume (3M): 25.18K
• Price to Earnings (P/E): 72.7
• Beta (1Y): 2.06
• Revenue Growth: 77.99%
• EPS Growth: 26.08%
• Country: IN
• Employees: 1,345
• Sector: Technology
• Sector Strength: 88
• Industry: Aerospace & Defense
• EPS (TTM): 10.61
• Shares Outstanding: 55,983,970
• 10 Day Avg. Volume: 17,393
• 30 Day Avg. Volume: 25,175
• PEG Ratio: 1.94
• Price to Book (P/B): 6.30
• Price to Sales (P/S): 13.41
• P/FCF Ratio: -75.52
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: ₹3,560.00
• Price Target Upside: 30.14% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1
• EPS Forecast (FY): 47.98
• Revenue Forecast (FY): ₹9.57B

• Rating: 68 Neutral
• Price Target: ₹3,497.00 ▲(27.83% Upside)
• Action: Downgraded Date: 02/07/26
• Date: Action: Downgraded 02/07/26

The score is primarily supported by strong financial performance (rapid revenue growth, very strong margins, and a low-leverage balance sheet). Technicals are constructive with the stock trading above major moving averages and neutral-to-positive momentum. The main constraint is valuation, with a high P/E and low dividend yield, and cash flow risk due to negative free cash flow.

Positive Factors

Revenue Growth

Sustained high top-line growth implies strong demand for mission-critical electronic systems and successful program execution. Over 2-6 months, this supports expanding backlog, scale advantages in production and engineering, and better negotiating leverage with suppliers and primes.

High Profitability

Very high and stable margins indicate differentiated product design, effective cost control and pricing power in defence/subsystem markets. Margin durability supports reinvestment in R&D and margins during program ramp-ups, underpinning long-term earnings resilience.

Conservative Balance Sheet

Minimal leverage and strong capitalization provide financial flexibility to fund program development and absorb contract timing volatility. Low debt reduces refinancing risk and preserves capacity for strategic investments or bidding on large defence programs.

Negative Factors

Negative Free Cash Flow

Negative FCF and a weakened operating-cash-to-income ratio signal cash conversion issues despite earnings, often due to milestone timing or working capital. Over months this can restrict funding for production, force external financing, and pressure sustainable reinvestment.

Declining Liquidity

Falling cash reserves reduce the buffer to meet contract milestones and warranty/support obligations. Even with low debt, diminished liquidity raises the chance of short-term funding needs if program receipts are delayed, affecting delivery and supplier terms.

Contract & Customer Concentration Risk

Dependence on program-based defence contracts and milestone billing creates revenue lumpiness and timing risk. Lack of disclosed customer concentration increases execution and renewal uncertainty, which can materially affect cash flow and growth visibility over several months.

Data Patterns (India) Limited Business Overview & Revenue Model

Company Description

Data Patterns (India) Limited provides defence and aerospace electronics solutions in India. The company offers COTS boards, ATE and test systems, RF and microwave warfare products, electronic warfare products, cockpit and rugged displays, radar and radar subsystems, identify friend and Foe products, avionic systems, laser and electro optic systems, space systems, power supply products, naval systems, communication products, gimbal and actuator controller products, launch and fire control systems, high speed processors, digital IF processors and waveform generators, consoles, and navigation systems; and software and application products. It also provides hardware design, product development, ATE/functional test equipment, FPGA, software, microwave, mechanical product design, manufacturing, and environmental qualification testing services. The company was incorporated in 1998 and is based in Chennai, India.

How the Company Makes Money

Data Patterns generates revenue primarily through the sale of its electronic products and systems, which are tailored for various applications in defense, aerospace, and industrial sectors. The company's revenue model is anchored in long-term contracts and project-based sales, which provide a steady stream of income. Key revenue streams include the sale of custom-designed electronic systems, ongoing maintenance and support services, and integration of complex electronics into larger platforms. Additionally, Data Patterns benefits from strategic partnerships with defense organizations and government agencies, which facilitate access to lucrative contracts and enhance the company's market position. The company's focus on R&D also allows it to stay competitive and innovate, further contributing to its earnings.

Data Patterns (India) Limited Financial Statement Overview

Summary

Strong operating performance with 36.23% revenue growth (2024 to 2025) and high profitability (gross margin 61.01%, net margin 31.30%, EBIT margin 44.91%). Balance sheet is very conservative with minimal leverage (debt-to-equity 0.004) and high equity ratio (81.98%). Offsetting this, cash flow is a clear risk with free cash flow falling to -1257 million and a negative operating cash flow to net income ratio.

Income Statement

Data Patterns has shown strong revenue growth over the years, with a notable increase in total revenue from 2024 to 2025 by 36.23%. The gross profit margin in 2025 was 61.01%, indicating efficient cost management. The net profit margin also improved to 31.30%, suggesting strong profitability. The EBIT margin of 44.91% and EBITDA margin of 38.82% in 2025 further highlight the company's operational efficiency and potential for sustained earnings.

Balance Sheet

The company maintains a solid balance sheet with a low debt-to-equity ratio of 0.004 in 2025, indicating minimal leverage and potential for financial stability. The return on equity (ROE) is high at 14.70%, reflecting effective use of shareholders' funds. The equity ratio of 81.98% highlights strong capitalization and financial resilience. However, the reduction in cash and short-term investments is a point to monitor.

Cash Flow

The free cash flow showed a negative trend in 2025, declining to -1257 million, which is concerning. Operating cash flow to net income ratio turned negative, indicating potential cash flow issues. However, the company has managed to reduce capital expenditure, which could improve future cash flows. Monitoring cash flow management will be crucial for sustainable growth.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	7.04B	7.08B	5.20B	4.53B	3.11B	2.24B
Gross Profit	4.36B	4.32B	3.48B	1.94B	2.25B	984.69M
EBITDA	3.03B	2.75B	2.68B	1.75B	1.40B	894.50M
Net Income	2.15B	2.22B	1.82B	1.24B	939.70M	555.60M
Balance Sheet
Total Assets	0.00	18.39B	16.92B	14.35B	7.07B	3.29B
Cash, Cash Equivalents and Short-Term Investments	4.53B	4.53B	6.55B	6.01B	1.77B	88.00M
Total Debt	0.00	61.70M	35.00M	24.90M	91.90M	371.70M
Total Liabilities	-15.08B	3.31B	3.68B	2.68B	1.32B	1.21B
Stockholders Equity	15.08B	15.08B	13.24B	11.67B	5.75B	2.08B
Cash Flow
Free Cash Flow	0.00	-1.26B	521.80M	-567.30M	139.90M	376.90M
Operating Cash Flow	0.00	-898.80M	1.39B	-172.40M	521.90M	433.80M
Investing Cash Flow	0.00	890.40M	-2.24B	-3.83B	-1.20B	87.60M
Financing Cash Flow	0.00	-496.40M	-425.30M	4.38B	2.36B	-448.60M

Data Patterns (India) Limited Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 2735.60
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IN:DATAPATTNS, the sentiment is Positive. The current price of 2735.6 is below the 20-day moving average (MA) of 2891.17, above the 50-day MA of 2690.21, and below the 200-day MA of 2749.03, indicating a bullish trend. The MACD of 154.34 indicates Negative momentum. The RSI at 71.04 is Negative, neither overbought nor oversold. The STOCH value of 82.16 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for IN:DATAPATTNS.

Data Patterns (India) Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BEL	77 Outperform	₹3.32T	54.48	―	0.60%	16.58%	25.45%
DATAPATTNS	68 Neutral	₹179.38B	72.70	―	0.30%	77.99%	26.08%
PARAS	68 Neutral	₹54.50B	70.04	―	0.07%	24.92%	50.07%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
BDL	60 Neutral	₹464.84B	79.98	―	0.33%	82.69%	18.17%
APOLLO	59 Neutral	₹75.89B	89.25	―	0.09%	39.76%	55.23%
ZENTEC	58 Neutral	₹121.46B	46.47	―	0.14%	9.71%	13.45%