Data Patterns (India) Limited — Q3 FY26 earnings call

Call held 6 Feb 2026

Management summary

Data Patterns delivered a robust Q3 FY26 performance characterized by record-high order books and strong revenue growth. The company is successfully transitioning from a subsystem supplier to a full systems and solutions provider in the defence sector. While working capital remains high, it is on a downward trajectory, and management expects significant cash inflows from maturing development contracts in the coming months.

Highlights

  • Revenue for Q3 FY26 grew 48% YoY to ₹173 crores, driven by improved execution across defence programs.

  • Order book reached an all-time high of ₹1,868 crores, the largest in the company's history.

  • EBITDA for the quarter stood at ₹78 crores, up 44% YoY with margins sustained at 44%.

  • PAT rose 31% YoY to ₹58 crores, translating to a net profit margin of 34%.

  • Working capital days improved significantly to 340 days from 428 days in March.

  • Negotiated orders not yet awarded stand at approximately ₹1,100 crores, expected to convert in 1-2 months.

  • Export order book remains healthy at approximately ₹63 crores, with export revenue at 9.6% for the quarter.

  • Management maintained medium-term revenue growth guidance of 20% to 25%.

Key financials

  1. Revenue ₹173 Cr +48%YoY
  2. EBITDA Margin 44%
  3. PAT ₹58 Cr +31%YoY
  4. Order Book ₹1,868 Cr
  5. Working Capital Days 340 days
  6. Net Profit Margin 34%

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.

Segment breakdown

  • Revenue Mix (9M FY26)
    57% Production37% Development

Guidance & targets

Revenue

  • Revenue Growth Revenue · medium term · High confidence 20% to 25%
    We remain committed to delivering 20% to 25% revenue growth over the medium term.

    — S. Rangarajan, Chairman & Managing Director

Other

  • Order Inflow (Negotiated) Other · next 1 to 2 months · High confidence ₹1,100 crores
    I think these contracts should happen in the next 1 to 2 months' time because these are only document work which has to be done in time. So, I think next 1 to 2 months' time, we should get converted into contracts.

    — S. Rangarajan, Chairman & Managing Director

  • Additional Order Inflow Other · next 2 to 3 months · Medium confidence ₹500-600 crores
    We also expect to sign more contracts in the next 2 to 3 months' time, probably another INR500 crores, INR600 crores of contracts, which can get signed.

    — S. Rangarajan, Chairman & Managing Director

  • Working Capital Cycle Other · next 3 to 5 years · Medium confidence 270 to 300 days
    And as we have been mentioning in our earlier calls also, over next probably some three to five years' time, it will gradually come down to 270 to maybe 300 days.

    — Venkata Subramanian, CFO

  • Total Addressable Market (TAM) Other · next 3 to 5 years · Medium confidence ₹15,000 to ₹20,000 crores
    So, we've taken money for QIP money to invest in large development activities, which can give business of around INR15,000 crores to INR20,000 crores of potential revenue.

    — S. Rangarajan, Chairman & Managing Director

Risks & concerns

  • Working Capital Intensity

    medium

    Working capital is high at 340 days due to large development contracts; management targets reduction to 270-300 days over 3-5 years.

    Both acknowledged

  • Execution Delays in Government Contracts

    medium

    Management noted that recent revenue increases were not 'sudden' but delayed orders from 2 years ago finally launching.

    Management acknowledged

  • Competitive Intensity in Radar/EW

    low

    Management believes their 15-18 year head start in building in-house IP and full-system capability provides a significant moat against new entrants.

    Analyst downplayed

Areas of evasion (2)

  • Specific content/value per aircraft for Sukhoi upgrades (cited HAL information sensitivity).
  • Exact timelines for AMCA prototyping (cited lack of government disclosure).

Q&A highlights

2 direct
Sustainability of High EBITDA Margins Direct
What you see when the EBITDA margins are higher... will be in products, which is completely designed in-house... Whereas we actually design the building blocks work on our raw material cost and write-off the revenue expenses on the year of development as part of our P&L.

Explains that high margins are structurally driven by in-house IP and R&D expensing rather than just favorable mix.

Asked by Amit Dixit, Goldman Sachs

Cash Position and Receivables Direct
The debtor situation has been extended, but we are expecting all the cash to come in the next 3 to 4 months' time... These are large value money, which will be coming in, which will recharge our cash battery.

Addresses concerns regarding the company's lowest cash levels in eight quarters by pointing to imminent milestone payments.

Asked by Hardik Rawat, IIFL Capital

Brahmos Seeker Production and Capacity Partial
The seeker business production order is not included in the next few months order book... we can scale up our infrastructure quite quickly since everything is designed by us.

Clarifies that the massive seeker production opportunity is a future upside not yet in the current pipeline, but the company is infrastructure-ready.

Asked by Akshay Jogani, Xponent Tribe

2 min read 5 chapters

Detailed narrative

Record Order Book and Pipeline Visibility

Data Patterns achieved a milestone with its order book reaching ₹1,868 crores, the highest in its history. Beyond the current book, management identified ₹1,100 crores of orders that have been negotiated and are expected to be signed within the next 1-2 months. Additionally, another ₹500-600 crores of contracts are expected in the next 2-3 months, providing strong revenue visibility for FY27 and beyond.

Structural Margin Resilience

The company maintained a high EBITDA margin of 44% in Q3 FY26. Management clarified that these margins are sustainable because they design 'building blocks' in-house rather than importing them. By owning the IP and writing off R&D expenses annually, the company captures higher gross margins on production orders compared to competitors who act primarily as system integrators.

Working Capital and Cash Flow Outlook

Working capital days improved to 340 days from 428 days at the start of the fiscal year. While cash on hand is currently at a multi-quarter low, management expects a significant 'recharge' in the next 3-4 months as large development contracts reach final acceptance and integration milestones. The long-term target is to bring working capital down to 270-300 days as the mix shifts more toward production.

Strategic Evolution to Full Systems Provider

Data Patterns is aggressively moving from being a subsystem supplier to a provider of complete systems like electronic warfare suites and fire control radars. They are currently investing QIP proceeds into development activities targeting a potential revenue pool of ₹15,000 to ₹20,000 crores. This includes high-value programs like the AMCA and LCA Mark 2 avionics.

Export Momentum and Global Partnerships

Exports contributed 9.6% to revenue this quarter, with an order book of ₹63 crores. Management is bullish on the European market following the EU-India FTA and is actively engaging with global defence majors for co-development. They are positioning themselves as a high-quality, low-cost alternative for IP-driven products, particularly in avionics and seekers, with plans to formalize a dedicated export team next year.

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