Skip to content

    Data Patterns (India) Q1 FY27 earnings call

    DATAPATTNS
    Capital Goods·31 Jul 2026
    Management Summary

    Data Patterns reported a healthy 17% YoY revenue growth to ₹116 crores in Q1 FY27, driven by diversified defense programs. Despite strong gross margins of 78.9%, EBITDA margins compressed to 27% due to elevated employee costs and product mix changes. The order book stands robust at ₹2,654 crores, with significant pipeline opportunities and initial traction in new segments like drones. The company remains net debt-free with substantial cash reserves, supporting ongoing strategic investments and capex plans.

    Highlights

    5

    • Revenue from operations for Q1 FY27 stood at ₹116 crores, registering a healthy 17% year-on-year growth.

    • Gross profit increased to ₹91.5 crores, with gross margins remaining strong at 78.9%.

    • Order book stands at ₹2,654 crores, including negotiated orders, providing healthy revenue visibility over the coming years.

    • Company maintains a strong balance sheet, remaining net debt free with cash, bank balances, and investments of ₹530 crores as of June 30, 2026.

    • Initial traction and orders received in the drone and counter-drone business, expected to be a significant growth driver.

    Concerns

    4

    • EBITDA margin stood at 27%, impacted by high employee costs due to capability expansion and changes in product mix.

    • Profit after tax stood at 19%, reflecting a temporary impact due to uneven quarterly revenue.

    • Other expenses rose by 64% due to additional repairs and maintenance costs and a provision of ₹2 crores for long-standing receivables.

    • Temporary delays in customer approval and inspection led to some revenue slippage from recognition in Q1 FY27.

    Key financials

    Single quarter

    07 metrics
    1. 01Revenue from Operations₹116 Cr+17%YoY
    2. 02Gross Profit₹91.5 Cr+16%YoY
    3. 03Gross Margin78.9%
    4. 04EBITDA₹31.4 Cr
    5. 05EBITDA Margin27%

    Order Book

    high confidence

    Total Value

    ₹ 2,654 crores

    as of 2026-07-31

    quantified

    Execution

    Execution varies from a few months to a few years depending on contract type and customer. HAL delivers over years, project orders 18-24 months, small subsystems faster.

    Composition

    International(geography)
    ₹ 39 crores

    Pipeline

    L1 awaiting loa

    Negotiated orders and expected fresh order inflows for FY27

    Cancellations / Deferrals

    • deferred:Temporary delays in customer approval and inspection for revenue recognition.
    • deferred:Some contracts from a large program delayed by over 1.5 years, with an additional 2 months extension.

    "Management acknowledges quarter-to-quarter revenue variability due to long-term project nature and customer-dependent inspection/approval processes, but expects normalization in coming quarters."

    Source:
    Prepared remarks

    Capital allocation

    4
    high confidence
    CategoryHeadline
    Capex

    ₹200 crores

    Debt

    Net ₹0 crores

    M&A

    ST Advanced

    acquisition · closed

    Liquidity

    Cash ₹530 crores

    Cash, bank balances and investments as of June 30, 2026, providing ample flexibility to support future growth initiatives.

    Guidance & targets

    8
    CategoryTargetPriority
    Revenue
    Full year revenue growth
    20-25%
    		High
    Profitability
    EBITDA margins
    35-40%
    		High
    Order Inflow
    Fresh order inflows
    ₹2,000 crores
    		High
    Order Book
    Order book size
    3 years of revenue projection
    		Medium
    Product Development
    Jammer pods for Su-30
    First trials in a few months, commercial production after that
    		Medium
    New Business
    Commercial orders for BrahMos seekers
    Expected this financial year
    		Medium
    New Business
    Counter-drone business contracts
    Start getting fructified
    		Medium
    Exports
    Export business growth
    Multimillion dollar business
    		Medium

    What to watch in Q2 FY27

    5

    EBITDA margin recovery

    Next quarters of FY27
    Current27%
    TargetTowards 35-40% range

    Why it matters

    Indicates the effectiveness of strategic investments and product mix changes in improving profitability.

    Margins during the quarter were impacted by high employee costs associated with capability expansion and changes in the product mix... maintaining EBITDA margins in the 35% to 40% range.

    Risks & concerns

    5
    RiskSeverity

    Uneven quarterly revenue recognition

    Revenue recognition is subject to customer approvals and inspections, leading to quarter-to-quarter variability, though full-year targets are expected to be met. — Management acknowledged

    medium

    Margin pressure from high employee costs and product mix

    High employee costs due to capability expansion and changes in product mix impacted EBITDA margins in Q1 FY27, expected to remain elevated in coming quarters. — Management acknowledged

    medium

    Delays in conversion of negotiated orders to contracts

    Large programs have experienced delays (e.g., 1.5 years plus 2 months extension) in finalizing approvals, impacting the conversion of negotiated orders into firm contracts. — Management acknowledged

    medium

    Dependence on government for space projects

    Investment in space systems and satellites depends on government funding and clarity on commercialization, with current activity mainly from startups. — Management acknowledged

    low

    Risk of delays for FY27 order inflow target of ₹2,000 crores

    The ₹2,000 crores fresh order inflow target for FY27 is linked to large projects, and while tenders are out, delays in contract finalization are a possibility. — Analyst acknowledged

    medium

    Q&A highlights

    8

    “Increase in other expenses is due to some additional repairs and maintenance costs, which is incurred because the facility is going through some revamping. So we had to spend some additional expenditure on repairs and maintenance. And also close to INR2 crores, we have additionally provided for against the long-standing receivables as per our policy.”

    Clarifies the reasons behind the significant rise in other expenses and its contribution to margin pressure this quarter.

    asked by Hardik Rawat

    2 min read6 chapters

    Detailed Narrative

    01

    Q1 FY27 Financial Performance Overview

    Data Patterns reported a 17% year-on-year revenue growth, reaching ₹116 crores in Q1 FY27. Gross profit also saw a 16% increase to ₹91.5 crores, maintaining a robust gross margin of 78.9%. However, EBITDA margins compressed to 27% (₹31.4 crores) from higher employee costs and product mix changes, while PAT stood at 19% (₹22.1 crores). Other expenses surged by 64% due to facility revamping costs and a ₹2 crore provision for long-standing receivables.

    02

    Strategic Investments and Long-Term Growth Outlook

    The company's strategic investments over recent years are translating into business opportunities and a stronger market position. Management highlighted healthy customer engagement across multiple defense programs, securing orders in avionics, radars, electronic warfare, and automotive test equipment. Data Patterns is transitioning products from development to complete system solutions, expanding its addressable market and enabling participation in larger, higher-value programs. The company aims for 20-25% revenue growth and 35-40% EBITDA margins for FY27.

    03

    Order Book and Pipeline Visibility

    The current order book stands at ₹2,654 crores as of July 31, 2026, including negotiated orders, providing healthy revenue visibility. The international order book contributes ₹39 crores. Management is confident of securing an additional ₹2,000 crores in fresh order inflows during FY27. While some large negotiated orders (e.g., ₹1,700 crores) have faced delays due to extended approval processes, they are expected to convert into contracts in the coming months⏳.

    04

    Traction in New Business Segments

    Data Patterns is gaining traction in new areas like drones and counter-drone solutions, with initial orders already received. The company is focusing on active detection (radars), passive detection (electronic intelligence), and countermeasures (jamming) for drones. Export business is also a key focus, with expectations of becoming a multimillion-dollar business in the next few months⏳ and scaling substantially in 2-3 years. Efforts are also underway to increase participation in naval platforms, working with DRDO for subsystems and radar applications.

    05

    ST Advanced Acquisition and Synergies

    The acquisition of ST Advanced is strategic, aiming to integrate composite capabilities for radomes into Data Patterns' sensor business. This will enable the company to offer complete system solutions rather than just components, enhancing its ability to secure larger contracts in India and abroad. While it's early to quantify financial impact, the goal is to leverage the combined capabilities to grow the overall business and address new market requirements.

    06

    Capital Expenditure and Technology Investments

    The company plans to invest over ₹200 crores in capex over the next two years, focusing on infrastructure development (buildings, clean rooms, integration facilities), production lines, and test equipment. Additionally, significant investments are being made in computer servers and IT infrastructure to support AI-driven initiatives. These investments are being made in parallel with order execution to ensure scalability and speed to market, leveraging the company's net debt-free status and ₹530 crores in cash and investments.

    This is an AI-generated summary of a publicly available earnings call transcript.