Data Patterns Q4 Review — Strong Growth Expected To Continue; But Rich Valuations Cap Upside: ICICI Direct

ICICI Direct Report

Data Patterns India Ltd. margins came in lower than estimates. Revenue was at Rs 185.1 crore; up 8.5% YoY. Sequentially, revenue was up 65.5% QoQ as execution remains better QoQ in Q4.

Ebitda margin contracted 1165 basis points YoY and 244 bps QoQ to 39.6% on the higher raw material cost; Ebitda came in at Rs 73.4 crore, down 16.1% YoY. PAT declined 10.2% YoY (+66.1% QoQ) to Rs 55.4 crore.

FY23 order inflows at Rs 901 crore; order backlog at Rs 1008 crore as on date.

Key triggers for future price performance:

• Order backlog of Rs 1008 crore is to be executed over the next 1.5-2 years.

• Data Patterns's healthy order pipeline of Rs 2,000-3,000 crore in the next three to four years provides strong visibility.

• Defence electronics provides huge opportunity of ~Rs 1.5 lakh crore in next four to five years led by armed forces’ requirement of advanced systems.

• Radars, electronic warfare, communication systems, satellites, avionics, fire control systems, check-out systems for Brahmos remains the key focus areas.

• With successful completion of Rs 500 crore QIP, new products development for domestic and international markets remains a key focus area.

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