Data Patterns (India) Limited — Q4 FY25 earnings call

Call held 19 May 2025

Management summary

Data Patterns delivered a strong Q4 and FY25 performance, exceeding guided revenue and profitability targets with significant year-on-year growth. The company reported a robust order book and outlined ambitious targets for FY26 order inflow and revenue growth, driven by strategic investments in R&D for full-system development and expansion into international markets. Despite some working capital stretch due to long-cycle development contracts, management remains confident in its execution capabilities and market opportunities in the growing defence sector.

Highlights

  • FY25 Revenue reached INR 780 crores, marking a 36% YoY growth.

  • Q4 FY25 Revenue stood at INR 396.2 crores, up 117% YoY and 239% QoQ.

  • FY25 PAT was INR 222 crores, a 22% YoY increase, with a PAT margin of 31%.

  • FY25 EBITDA was INR 275 crores, up 24% YoY, with an EBITDA margin of 39%.

  • Order book as of March 31, 2025, was INR 730 crores, growing to INR 860 crores with negotiated contracts.

  • Board recommended a dividend of INR 7.9 per equity share (face value INR 2).

  • Company remains debt-free with INR 453 crores in cash and cash equivalents as of March 31, 2025.

  • Guided FY26 revenue growth of 20-25% and EBITDA margin of 35-40%.

Key financials

2 periods

Q4 FY25

  • Revenue
    ₹396.2 Cr
    YoY +117% QoQ +239%
  • Gross Margin
    49%
  • EBITDA
    ₹150 Cr
    YoY +61% QoQ +177%
  • EBITDA Margin
    38%
  • PAT
    ₹114 Cr
    YoY +61% QoQ +155%
  • PAT Margin
    29%

FY25

  • Revenue
    ₹780 Cr
    YoY +36%
  • Gross Margin
    61%
  • EBITDA
    ₹275 Cr
    YoY +24%
  • EBITDA Margin
    39%
  • PAT
    ₹222 Cr
    YoY +22%
  • PAT Margin
    31%

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

SegmentDevelopment ContractsProduction Contracts
Q4 FY25 Revenue Mix57%42%
Q4 FY25 Revenue by Product——
FY25 Revenue Mix43%53%

Order book

high confidence

Total value

₹860 Cr

as of 2025-05-19 quantified

Execution

More than 70% to 80% of the existing orders on hand will get executed this year. Some portion of the orders coming this year will also be executed this year.

Composition

  • International (client type) ₹107 Cr

Pipeline

other

FY26 order inflow expected from single-vendor, repeat orders, and emergency procurement.

Cancellations & deferrals

  • deferred: Some revenue recognition was impacted due to client request on deferment in delivery in earlier quarters; some delivered, some awaiting clearance.
  • deferred: Some FY25 orders got delayed and are now expected to happen in FY26.
Order book remains strong, with a healthy pipeline of single-vendor and repeat contracts, despite some delays in FY25 due to external factors. Management is confident in achieving FY26 order inflow targets.

Source: Prepared remarks

Capital allocation

high confidence
  • Capex ₹150 Cr
    • Infrastructure for production, test and validate systems ₹150 Cr
    We're also spending about INR150 crores in the next 1 to 2 years' time to create infrastructure to production, test and validate systems which we expect the contracts to happen in 2 to 3 years coming.
  • Debt Gross ₹0 Cr · Net ₹0 Cr · 0.0× EBITDA
    We remain a debt-free company in FY '25 also.
  • Dividend ₹7.9/share (final)
    We are happy to inform you that our Board has recommended a dividend of INR7.9 per equity share of INR2 each, which is subject to approval of the shareholders.
  • Liquidity Cash ₹453 Cr Robust liquidity position maintained.
    As of 31st March 2025, we maintain a robust liquidity position with over INR453 crores in cash and cash equivalents.

Guidance & targets

Revenue

  • Revenue Growth Revenue · FY26 · High confidence 20-25%
    We anticipate a good ramp-up in order inflow in FY '26 and remain confident in achieving 25% to 30% or 20% to 25% revenue growth for FY '26 while maintaining strong EBITDA margins at 35% to 40%.

    — S. Rangarajan

Profitability

  • EBITDA Margin Profitability · FY26 · High confidence 35-40%
    We anticipate a good ramp-up in order inflow in FY '26 and remain confident in achieving 25% to 30% or 20% to 25% revenue growth for FY '26 while maintaining strong EBITDA margins at 35% to 40%.

    — S. Rangarajan

  • Bottom Line Growth Profitability · FY26 · High confidence 20%
    But today, we are looking at a 20%, 25% topline growth and a 20% bottom line growth is what we're looking at. And we want to stick to that guideline, not 30% bottom line, maybe it will happen. It's possible it can happen, but at the present moment we can't comment on that.

    — S. Rangarajan

Order Inflow

  • Order Inflow Order Inflow · FY26 · High confidence INR 1,000-2,000 crores
    And maybe it's somewhere between INR1,000 crores and INR2,000 crores is what we expect during the course of this year to get orders.

    — S. Rangarajan

Market Opportunity

  • Total Addressable Market (TAM) for R&D efforts Market Opportunity · 3 to 6 years · Medium confidence INR 20,000-30,000 crores
    I mean, there is a value of orders that you could be bidding for based on your capabilities and R&D programs that you are undertaking. So that is a slightly longer-term question. And for FY '26, what will be the size of order intake? Or what is the prospects that you are bidding for? ... I expect that the size of opportunities or the TAM for all this probably vary between INR20,000 crores to INR30,000 crores.

    — S. Rangarajan

Revenue Mix

  • Production & Service Revenue Contribution Revenue Mix · future (mature model) · Medium confidence >70%

    From 55% today

    As long as the product development has happened and approvals happen, definitely, the production should start growing 70% and above. This is what we think we'll do. We'll continue to develop products maybe 20% or 15%. That is how this has to go for a mature model.

    — S. Rangarajan

What to watch in Q1 FY26

Delivery of previously deferred orders

Q1/Q2 FY26
Current Some delivered, some pending clearance
Target Full delivery and revenue recognition

Why it matters

Resolution of these orders will contribute to revenue and improve working capital.

Some of it has got delivered. Some is yet to be delivered. We are still waiting customer clearance inspection for some of them. I wouldn't like to quantify the order value, but I think this quarter or next quarter, that also should get delivered.

Risks & concerns

  • Order inflow delays due to external factors and MoD postponements

    medium

    Fresh order intake was lower than anticipated in FY25 due to external factors and postponement of some MoD orders, though these are expected to materialize in FY26.

    Management acknowledged

  • Long development cycles for full systems and new products

    medium

    Developing full systems, flight trials, qualification, and certification can take 2-3 years, delaying revenue conversion from R&D investments.

    Management acknowledged

  • Stretched working capital due to development-centric contracts

    medium

    Working capital days increased due to long turnaround times for development-centric contracts, integration, and testing phases, though expected to improve in 2-3 years.

    Management acknowledged

Q&A highlights

7 direct
Resolution of deferred revenue recognition from earlier quarters Partial
Some of it has got delivered. Some is yet to be delivered. We are still waiting customer clearance inspection for some of them. I wouldn't like to quantify the order value, but I think this quarter or next quarter, that also should get delivered.

Clarifies the status of previously deferred orders, indicating potential revenue recognition in the near term.

Asked by Dipen

BrahMos seeker orders after successful testing Direct
We expect that in shortly, we should get more some more orders from BrahMos for the development of additional units will be asked. Following up with that, we expect also production contracts to happen. Maybe in the next month plus probably another year, the production orders also should happen.

Provides a timeline for potential significant production orders for BrahMos seekers, a key indigenous defence program.

Asked by Dipen

Confidence in FY26 order inflow target of INR 1,000-2,000 crores Direct
No. We are sure about this order because these orders have already been received by customers and back-to-back inquiry should start in the next month or so. And we will be the single vendor contract for all of them based on our earlier delivered products. So we are sure of those orders. It's a question of 1 or 2 months here and there may happen.

Reassures investors about the certainty and source of the projected FY26 order inflow, emphasizing single-vendor and repeat contracts.

Asked by Garvit Goyal

High net working capital days and expected improvement Direct
I think given another 2 to 3 years' time and the development is lesser and the production is more, then the turnaround time will be faster, cash realization is faster, working capital days will come down. So this is a transitory state.

Explains the reasons for the elevated working capital days (development-centric projects) and provides a timeline for expected improvement as the business shifts more towards production.

Asked by Jyoti Gupta

Strategic rationale for taking low-margin contracts Direct
So we took this contract strategically to say the margins are not important. It is important that we build capability in the company. So that is why we took it.

Clarifies that certain low-margin contracts are accepted for strategic reasons, such as capability building and scaling for larger future projects, rather than immediate profitability.

Asked by Jyoti Gupta

R&D expenditure, TAM expansion, and future product focus Direct
Today, we are trying to get into a full-system business. So the development expenses is going to be far, far higher. ... And that we have spent more than INR140-odd crores on product development in the last 1.5 years' time. ... This has a very large requirement in INR20,000 crores or INR30,000 ... worth of adequate requirement is there.

Details the significant R&D investments made for developing full systems and expanding the total addressable market, outlining the long-term strategic vision.

Asked by Yash Poddar

Involvement in Sukhoi 30 upgrades and large defence programs (LLTR, FDR, EW suite) Direct
As regard Ashwini Radar, BEL has got the order last year... we are in discussion with them. We expect that their requirements will flow down to us... As regards Sukhoi 30, this is a contract which is already placed on HAL... We are developing products against it. We don't have a contract on this. We have developed the radar warning receiver... We've also designed the AESA fire control radar hardware... DACH cleared about INR7,400 crores for the jammer parts.

Highlights the company's deep involvement in critical, large-scale defence programs and upgrades, showcasing its technological capabilities and potential for future orders.

Asked by Rupesh

Export opportunities and collaboration with foreign companies Direct
It is possible to do part development in India for future requirements of their Western systems requirement. So we are also in touch with one such company where we can do a joint development of radars, where this will not only look at -- address requirements in India, but also globally, we can build systems together.

Indicates the company's strategy to expand into global markets through part development and joint ventures, leveraging its capabilities to address international demand.

Asked by Lavina

2 min read 6 chapters

Detailed narrative

Strong Financial Performance in Q4 and FY25

Data Patterns reported a robust financial performance for Q4 and the full fiscal year 2025. Q4 revenue surged by 117% year-on-year and 239% quarter-on-quarter to INR 396.2 crores. For the full year, revenue grew 36% to INR 780 crores. PAT for FY25 increased by 22% to INR 222 crores, achieving a 31% PAT margin, while EBITDA for FY25 grew 24% to INR 275 crores, with a 39% EBITDA margin.

Robust Order Book and Positive FY26 Outlook

The company's order book stood at INR 730 crores as of March 31, 2025, and increased to INR 860 crores including negotiated contracts as of the call date. Management anticipates a strong order inflow of INR 1,000-2,000 crores for FY26, primarily from single-vendor, repeat orders, and emergency procurements. Over 70-80% of the existing order book is expected to be executed within the current fiscal year, with some portion of new FY26 orders also being delivered within the year.

Strategic Investments in R&D and Full-System Development

Data Patterns has invested over INR 140 crores in product development over the last 1.5 years, focusing on advanced systems like fire control radars, airborne electronic warfare suites, ELINT, COMINT, jammers, and seekers. These efforts aim to transition the company from a component supplier to a full-system provider, targeting a total addressable market (TAM) of INR 20,000-30,000 crores over the next 3-6 years. The successful testing of the BrahMos seeker is expected to lead to significant production orders in the near future.

Working Capital Management and Margin Strategy

Net working capital days increased from 421 to 468, attributed to the long gestation periods of development-centric contracts, integration, and extensive testing phases. Management expects working capital days to improve within 2-3 years as the business matures towards higher production volumes. Despite some low-margin strategic contracts impacting Q4 gross margins (49%), the full-year gross margin remained healthy at 61%, as these contracts were undertaken to build capability and scale for larger, more profitable programs.

Expanding Capabilities and Infrastructure

The company is actively enhancing its engineering and design capabilities, with approximately 1,100 engineers in its workforce of 1,600. An additional INR 150 crores is planned for capital expenditure over the next 1-2 years to build infrastructure for production, testing, and validation of systems. This investment is crucial to support the anticipated large contracts and ensure timely delivery, reinforcing the company's position in the defence sector.

Global Market Expansion and Collaboration

Data Patterns is actively exploring international markets, particularly Europe and East Asia, for its integrated systems. While exporting full systems presents challenges, the company is pursuing part development and joint ventures for radars and UAV-based systems with foreign partners. This strategy aims to leverage its capabilities to address global demand and diversify its revenue streams beyond domestic government orders.

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