Data Patterns (India) Limited — Q2 FY26 earnings call

Call held 13 Nov 2025

Management summary

Data Patterns delivered strong Q2 and H1 FY26 results, with revenue more than doubling year-on-year in Q2, despite margin pressure from a strategic, low-margin project. The company maintains a robust order book of ₹1,300 crores and expects significant order inflows in H2 FY26, driven by advanced product development and a strategic shift towards full system exports. Management remains confident in achieving full-year guidance and improving working capital efficiency.

Highlights

  • Q2 FY26 Revenue of ₹308 crores, up 238% YoY and 210% QoQ

  • H1 FY26 Revenue of ₹407 crores, up 109% YoY

  • Q2 FY26 EBITDA of ₹69 crores, up 100% YoY, with a 22% margin

  • H1 FY26 EBITDA of ₹101 crores, up 41% YoY

  • Q2 FY26 PAT of ₹49 crores, up 63% YoY, with a 16% margin

  • Order book stands at approximately ₹1,300 crores as of September 30, 2025

  • Fresh order inflows of ₹351 crores during H1 FY26

  • Working capital days at 343, with a long-term target of 270 days

Key financials

3 periods

Headline

  • Working Capital Days
    343 days

Q2 FY26

  • Revenue
    ₹308 Cr
    YoY +238% QoQ +210%
  • EBITDA
    ₹69 Cr
    YoY +100%
  • PAT
    ₹49 Cr
    YoY +63%
  • Gross Margin
    39%
  • EBITDA Margin
    22%
  • PAT Margin
    16%

H1 FY26

  • Revenue
    ₹407 Cr
    YoY +109%
  • EBITDA
    ₹101 Cr
    YoY +41%
  • PAT
    ₹75 Cr
    YoY +18%

What they filed

Q1 FY27: revenue up 17.2%, net profit down 15.4% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue91 117 396 99 307 +237%173 +48%345 −13%116 +17%
EBITDA34 54 149 32 68 +100%81 +50%193 +30%31 −3%
Net profit30 45 114 26 49 +63%58 +29%138 +21%22 −15%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Order book

high confidence

Total value

₹1,300 Cr

as of 2025-09-30 quantified

Inflow this quarter

₹351 Cr

Composition

  • Export (geography) ₹80 Cr

Pipeline

other

Orders negotiated but not confirmed

Order book is healthy and includes negotiated and pending orders, with significant H1 inflows and expectations for more in H2.

Source: Prepared remarks

Capital allocation

high confidence
  • Capex Capex disclosed
    • Product development from QIP proceeds ₹122 Cr
    So far, we've utilized approximately INR122 crores from the QIP proceeds for product development.
  • Debt Gross ₹0 Cr · Net ₹0 Cr
    And we still remain a debt-free company.

Guidance & targets

Profitability

  • EBITDA Margin (Q2 FY26 without strategic project) Profitability · Q2 FY26 · High confidence 35-40%
    Yes, definitely.

    — S. Rangarajan

Working Capital

  • Working Capital Days Working Capital · Full year · Medium confidence similar level (to 343 days)
    aim to maintain the working capital days at the similar level for the full year.

    — Venkata Subramanian

  • Working Capital Days Working Capital · Gradually, long-term · Medium confidence 270 days

    From 345 days today

    Going ahead, I think gradually, it will from 345 days, it will come to 270 days and then maybe go down further depending on the kind of contracts we get, nature of contracts

    — S. Rangarajan

  • Cash Conversion Cycle (excluding advances) Working Capital · Current position · Medium confidence 310 to 315 days
    Yes. If you exclude it, it will be around 310 to 315 days such thing at current position.

    — Venkata Subramanian

Order Inflow

  • Order Inflow Order Inflow · FY26 · High confidence crossing that INR1,500-odd mark
    Yes.

    — S. Rangarajan

What to watch in Q3 FY26

BrahMos Seeker Contract Award

Next 2-3 months
Current Negotiations completed, advanced product development
Target Contract awarded

Why it matters

Signals conversion of pipeline into firm orders and potential for production orders, contributing to H2 order inflow.

Yes, the negotiations are completed. So the contract has to come, and we are already in advanced stage of product development. So yes, we are very keen to see that, that contract comes and quickly deliver because there is likelihood of production orders in this.

Risks & concerns

  • Competition in Defence Market

    medium

    Competition comes from abroad, and India still imports a significant portion of its defence requirements, making it challenging to secure all orders despite indigenous development.

    Competition is not only India, it comes from abroad also. There are mature products abroad, which is also -- do a work share and offered in India. India actually imports more than 70%, 80% of our requirements. So you should not forget that. You can't say it's not made in India, only Data Pattern is doing it, so you'll get all the orders. That also doesn't happen. People tie up with foreigners, and we offer the products in India.

    Management acknowledged

  • Long Development Cycles for Defence Contracts

    medium

    Defence contracts, especially development ones, involve long periods for delivery, testing, and integration, which impacts the cash conversion cycle.

    See, what happens is we're doing a lot of development contracts. This takes a longer time for cash conversion once we deliver and test, we have integration and things like that in testing, field testing. So take a longer time to really achieve the cash conversion cycle.

    Management acknowledged

Q&A highlights

5 direct, 1 evasive
Strategic Order and Margin Impact Evasive
See, I can't discuss much on the strategic order. That's why it's called a strategic order. But we took this contract because there is a large potential for multiple such contracts.

Management confirmed a strategic, low-margin contract impacted Q2 profitability but was taken for long-term opportunities, without disclosing specifics.

Asked by Amit Dixit

AMCA Consortium and Scope Partial
As you said, it's a bit too early. It's an RFI response. And after RFI shortlisting takes place, an RFP happens and then the contract goes to somebody. It is only one company which gets the contract. So it's very early for me to comment on it.

Discussed participation in the AMCA consortium with BEML and Bharat Forge, highlighting early stages and the company's avionics expertise, but no specifics on potential share or role.

Asked by Amit Dixit

Jammer Pods for Super Sukhoi Direct
As regard the jammer pod, yes, we have developed the pod for the Super Sukhoi and that testing is happening in-house. We've already offered this to Air Force. The Air Force team also addressing this and understanding what we've done.

Confirmed development and in-house testing of jammer pods for Super Sukhoi, with an offer made to the Air Force, indicating potential future orders.

Asked by Jayakanth

BrahMos Seeker Update Direct
Yes, the negotiations are completed. So the contract has to come, and we are already in advanced stage of product development. So yes, we are very keen to see that, that contract comes and quickly deliver because there is likelihood of production orders in this.

Confirmed completion of negotiations for the BrahMos Seeker contract and advanced product development, signaling imminent contract award and potential production orders.

Asked by Dipen

Working Capital Cycle Reduction Direct
So once we move from larger development contracts to production orders is yet to happen, something happens, but it's not the way we ought to happen. We need to have a lot of order book where we can do quarter-to-quarter sales. And then production orders get you what maybe a few months collectible, et cetera. Unless that happens, cycle will not change so drastically.

Explained the challenges in reducing working capital days due to the nature of development contracts and the need for more production orders, providing a long-term target of 270 days.

Asked by Sumant Kumar

New Products in Development and TAM Direct
We're working on radars on a number of them actually, various kinds of radars... We're also looking at EW programs for airborne podded and unpodded versions... We're also doing some communication systems... glass cockpit and a whole lot of other things for avionics... And those areas are also seekers. They are building some next-generation seekers. For TAM, that is about INR15,000 crores to INR20,000 crores.

Provided a comprehensive overview of new product development across radars, EW, communication systems, avionics, and seekers, and quantified the Total Addressable Market (TAM) for these products.

Asked by Garvit Goyal

Export Market Potential and TPAR Direct
It gives a larger opening for us to actually build products for the rest of the world. So the focus should be there as we go along. But we started with subsystems and now we have gone into systems. So we will focus on both of them.

Discussed the significance of the first fully developed radar (TPAR) export for opening up global markets and the strategic shift from subsystem to full system exports.

Asked by Lavina Quadros

2 min read 6 chapters

Detailed narrative

Q2 & H1 FY26 Performance Overview

Data Patterns reported robust financial results for Q2 and H1 FY26. Q2 revenue surged to INR 308 crores, marking a 238% year-on-year and 210% quarter-on-quarter increase. For the first half, revenue reached INR 407 crores, up 109% YoY. EBITDA for Q2 stood at INR 69 crores (up 100% YoY) and for H1 at INR 101 crores (up 41% YoY). Net profit for Q2 was INR 49 crores (up 63% YoY) and for H1 was INR 75 crores (up 18% YoY).

Strategic Project and Margin Impact

The company's Q2 profitability was impacted by the execution of a strategic, low-margin project valued at INR 180 crores. This contract, taken at a competitive price, was crucial for long-term opportunities and demonstrating capability in complex electromechanical systems. Consequently, Q2 gross margin was 39%, EBITDA margin 22%, and PAT margin 16%. Management indicated that without this specific project, Q2 EBITDA margins would have been in the guided range of 35-40%.

Order Book and Inflows

As of September 30, 2025, Data Patterns' order book, including negotiated and pending orders, stands at approximately INR 1,300 crores. Fresh order inflows during H1 FY26 totaled INR 351 crores, with significant contributions from BrahMos and ECIL. Additionally, INR 550 crores worth of orders have been negotiated but are yet to be confirmed. Management expressed confidence in surpassing INR 1,500 crores in order inflows for the full FY26.

Product Development and Export Focus

The company is heavily invested in product development, utilizing approximately INR 122 crores from QIP proceeds. Key development areas include various radars (fire control, ground, drone detection), EW systems, communication systems, avionics, and next-generation seekers. Data Patterns is also strategically expanding its export footprint, with the Transportable Precision Approach Radar (TPAR) successfully accepted by a European customer, and expects further international traction. The Total Addressable Market (TAM) for these new products is estimated at INR 15,000-20,000 crores.

Capital Allocation and Working Capital

Data Patterns maintains a debt-free status. Working capital days were reported at 343 days, with management aiming to keep this at a similar level for the full year, expecting significant receivables collection in H2. Long-term, the company targets reducing working capital days to around 270, contingent on a shift towards more production-oriented contracts. The cash conversion cycle, excluding customer advances, is estimated at 310-315 days.

Outlook and Future Growth Drivers

Management is confident in achieving its full-year revenue and EBITDA margin guidance, supported by a healthy order pipeline and strong execution capabilities. They anticipate securing more high-value orders in the coming quarters as their advanced technology and products gain wider market acceptance. The company's strategy involves proactive development of indigenous solutions and a transition from a subsystem supplier to a full systems integrator, addressing both domestic and international defence needs.

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