Table of Contents
Introduction
Data Patterns (India) Limited (NSE Code: DATAPATTNS ), a leading defense and aerospace electronics company, recently held its Q3 FY ā25 earnings conference call. The companyās financial performance, order book strength, and growth strategies paint a promising picture for investors. This blog post will provide a detailed analysis of the companyās latest financials, strategic moves, and future outlook, with tables for easy data visualization.
1. Financial Performance Highlights
Revenue and Profitability
| Financial Metric | Q3 FY ā25 | Q2 FY ā25 | % Change QoQ | 9M FY ā25 | 9M FY ā24 | % Change YoY |
|---|---|---|---|---|---|---|
| Revenue (INR Cr) | 117 | 91 | +29% | 312 | 337 | -7.5% |
| Gross Margin | 80% | 78% | +2% | 79% | 75% | +4% |
| EBITDA Margin | 40% | 38% | +2% | 40% | 42% | -2% |
| Net Profit (INR Cr) | 44.7 | 36.2 | +23.5% | 179 | 124 | +44% |
Order Book & Inflows
| Financial Metric | Q3 FY ā25 | Q2 FY ā25 | Total 9M FY ā25 |
| Order Inflows (INR Cr) | 240 | 84 | 324 |
| Total Order Book (INR Cr) | 1,184 | 950 | 1,184 |
| International Orders (INR Cr) | 106 | 95 | 106 |
2. Key Business Updates
- Export Market Expansion: A strong focus on European and East Asian markets led to international orders worth INR 106 crore.
- R&D Investments: New products will be showcased at the Defense Expo 2025.
- Indian Defense Budget: The governmentās INR 6.8 lakh crore allocation for FY ā25-ā26, with 75% for indigenous manufacturing, boosts growth prospects.
3. Managementās Outlook
- Revenue Growth Guidance: 20%-25% for FY ā25, with EBITDA margins at 35%-40%.
- Order Pipeline: INR 20-30 billion in new orders expected over 18 months.
- Export Strategy: Strengthening market presence through export-worthy products and global marketing.
4. Challenges and Mitigation Strategies
| Challenge | Impact | Mitigation Strategy |
| Delivery Deferments | Delayed revenue recognition | Engaging with customers to expedite shipments |
| High Inventory Days | Increased from 155 to 187 | Normalization expected post radar project completion |
| Investor Concerns | Slower revenue growth | Expanding addressable markets and order pipeline |
5. Financial & Valuation Metrics
Balance Sheet Overview
| Category | 2021-03 | 2024-09 |
| Shareholder Funds (INR Cr) | 208 | 1,350 |
| Non-Current Liabilities (INR Cr) | 141 | 39 |
| Current Liabilities (INR Cr) | 72 | 314 |
| Non-Current Assets (INR Cr) | 330 | 335 |
| Current Assets (INR Cr) | 261 | 1,367 |
Key Valuation Ratios
| Ratio | Value |
| EPS (INR) | 31.94 |
| P/E Ratio | 52.53 |
| P/B Ratio | 6.74 |
| Dividend Yield | 0.40% |
| Debt-to-Equity | 0.00 (Debt-Free) |
6. Technical Analysis: Is a Rebound Possible?
Recent Price Performance
| Period | Change |
| 1 Day | +14.58% |
| 1 Week | +13.25% |
| 1 Month | -15.41% |
| 3 Months | -37.36% |
| 6 Months | -40.54% |
| 1 Year | -39.65% |
| 2 Years | +26.00% |
Momentum & Volatility Indicators
| Indicator | Value | Interpretation |
| RSI (Daily) | 46.30 | Neutral |
| MACD | -144.82 | Bearish |
| ADX | 38.70 | Trending |
| Bollinger Bands | 0.37 | Consolidation |
| ATR | 121.36 | High Volatility |
1. Relative Strength Index (RSI)
- Daily RSI: 46.30 (Neutral)
- Weekly RSI: 33.57 (Neutral)
The Relative Strength Index (RSI) is a key momentum indicator that measures the speed and change of price movements. The daily RSI is in the neutral zone, suggesting that the stock is neither overbought nor oversold. However, the weekly RSI is closer to the oversold zone, which could indicate that the stock is due for a potential rebound.
2. Commodity Channel Index (CCI)
- CCI: -9.54 (Neutral)
The Commodity Channel Index (CCI) is also in the neutral zone, indicating that there is no strong trend in either direction. This suggests that the stock is in a consolidation phase, waiting for a catalyst to move higher or lower.
3. Money Flow Index (MFI)
- MFI: 89.31 (Overbought)
The Money Flow Index (MFI) is in the overbought zone, which could indicate that the stock is due for a short-term pullback. However, this should be taken in context with other indicators, as the stock has shown strong momentum in recent days.
4. Rate of Change (ROC)
- ROC: 14.36 (Positive)
The Rate of Change (ROC) is positive, indicating that the stockās price momentum is currently upward. This is a bullish signal, especially when combined with the recent price gains.
Relative Strength
1. Relative Strength Benchmark Index
- 21 Days: -0.16 (Negative)
- 55 Days: -0.30 (Negative)
The Relative Strength Benchmark Index is negative over both the 21-day and 55-day periods, indicating that the stock has underperformed its benchmark index. This could be a concern for investors looking for relative strength in their investments.
2. Static and Adaptive Relative Strength
- Static Relative Strength: -0.33 (Negative)
- Adaptive Relative Strength: -0.43 (Negative)
Both the Static and Adaptive Relative Strength indicators are in the negative zone, suggesting that the stock is underperforming compared to its peers and the broader market.
Trend and Volatility Indicators
1. Average Directional Index (ADX)
- ADX: 38.70 (Trending)
The Average Directional Index (ADX) is in the trending zone, indicating that the stock is currently in a strong trend. Given the recent price gains, this trend is likely upward.
2. Moving Average Convergence Divergence (MACD)
- MACD: -144.82 (Negative)
The MACD is in the negative zone, which is a bearish signal. However, this should be considered alongside other indicators, as the stock has shown strong momentum in recent days.
3. Volatility Indicators
- Average True Range (ATR): 121.36
- Bollinger Band Width: 0.37
- Beta (Benchmark Index): 1.22
- Beta (Sectoral Index): 1.19
The stock has a high beta compared to both the benchmark and sectoral indices, indicating that it is more volatile than the broader market. The Bollinger Band Width is relatively narrow, suggesting that the stock is in a period of low volatility, which could precede a breakout.
Conclusion
Data Patterns India has shown strong short-term momentum, with significant price gains over the past week. However, the stock remains in a long-term downtrend, with negative relative strength and high volatility. The technical indicators suggest that the stock is in a consolidation phase, with potential for a rebound if the current momentum continues.
Key Takeaways:
- Strengths: Strong short-term momentum, positive Rate of Change (ROC), and trending ADX.
- Weaknesses: Negative MACD, underperformance relative to benchmarks, and high volatility.
- Opportunities: A breakout from the current consolidation phase could lead to further upside.
- Threats: High beta and overbought MFI could lead to short-term pullbacks.
Investors should keep a close eye on the stockās momentum and relative strength indicators. While the stock has shown potential for a rebound, the high volatility and negative MACD suggest that caution is warranted. For long-term investors, the stockās strong fundamentals and growth prospects make it an attractive option, but short-term traders should be prepared for potential volatility.
Recent Performance Overview
Price Performance
- Last Month Close: ā¹1,427.75
- Current Close: ā¹1,628.25
- Change Since Last Month: +13.2%
The stock has shown strong short-term momentum, with a 13.2% increase from last monthās close. This is a positive sign, especially after a period of significant underperformance.
52-Week Performance
- 52-Week High: ā¹3,658.00
- 52-Week Low: ā¹1,351.15
- Current Price vs. 52-Week High: -55.5%
- Current Price vs. 52-Week Low: +20.8%
The stock is still 55.5% below its 52-week high, but it has risen 20.8% from its 52-week low, indicating a potential recovery from the bottom.
Trading Activity and Delivery Quantity
Higher Trade and Delivery Quantity
- Delivered Quantity This Week: 13,642.77
- Average Delivered Quantity (5 Weeks): 5,353.928
- Traded Quantity This Week: 1,45,00,231
- Average Traded Quantity: 29,825.98
The stock has seen a significant increase in both traded and delivered quantities this week, with delivered quantity 2.6x higher than the 5-week average and traded quantity 4.9x higher. This indicates strong buying interest and could be a sign of accumulation by institutional or retail investors.
Relative Strength and Benchmark Performance
Relative Strength (RS)
- Relative Strength vs. NIFTY 50 (55 Days): -0.30
- Relative Strength vs. NIFTY INFRA (55 Days): -0.29
The stock has been underperforming both the NIFTY 50 and NIFTY INFRA indices over the past 55 days. However, the 3-day Relative Strength (RS) has shown an increase of +0.11, suggesting that the stock may be starting to outperform in the short term.
Momentum Indicators
1. Relative Strength Index (RSI)
- Daily RSI: 46.30 (Neutral)
- Weekly RSI: 33.57 (Neutral)
The RSI is in the neutral zone, indicating that the stock is neither overbought nor oversold. However, the weekly RSI is closer to the oversold zone, which could indicate that the stock is due for a potential rebound.
2. Rate of Change (ROC)
- ROC: 14.36 (Positive)
- Previous ROC: -6.41
The Rate of Change (ROC) has turned positive, indicating that the stockās price momentum is currently upward. This is a bullish signal, especially when combined with the recent price gains.
3. Parabolic SAR (PSAR)
- PSAR: ā¹1,351.15 (Bullish Reversal)
The Parabolic SAR is indicating a bullish reversal, suggesting that the stock may be transitioning from a downtrend to an uptrend. This is a strong bullish signal for traders.
Volatility and Trend Indicators
1. Average True Range (ATR)
- ATR: 121.36
The Average True Range (ATR) indicates that the stock has been experiencing high volatility, which is typical for stocks in a recovery phase.
2. Bollinger Bands
- Bollinger Band Width: 0.37
- Bollinger Band %B: 0.57
The Bollinger Band Width is relatively narrow, suggesting that the stock is in a period of low volatility, which could precede a breakout. The %B value of 0.57 indicates that the stock is trading near the middle of the Bollinger Bands, which is a neutral signal.
Conclusion
Data Patterns India has shown strong short-term momentum, with significant price gains over the past month and increased trading activity. The stock is still in a long-term downtrend, but recent indicators such as the bullish PSAR, positive ROC, and increasing Relative Strength suggest that the stock may be setting up for a rebound.
Key Takeaways:
- Strengths: Strong short-term momentum, increasing trading activity, and bullish PSAR.
- Weaknesses: Underperformance relative to benchmarks and high volatility.
- Opportunities: A breakout from the current consolidation phase could lead to further upside.
- Threats: High volatility and potential resistance levels near the 52-week high.
Investors should keep a close eye on the stockās momentum and relative strength indicators. While the stock has shown potential for a rebound, the high volatility and underperformance relative to benchmarks suggest that caution is warranted. For long-term investors, the stockās strong fundamentals and growth prospects make it an attractive option, but short-term traders should be prepared for potential volatility.
Technical Analysis of Data Patterns India: A Visual Perspective
Chart Overview / Volume Analysis
1. Volume Trends
- 2021 to 2023: The volume appears to have been relatively stable during this period, with no significant spikes or drops. This suggests that the stock was trading within a normal range without any major news or events driving large shifts in trading activity.
- 2023 to 07 Mar 2025: The volume shows a noticeable increase towards the end of the period, particularly around 07 Mar 2025. This could indicate increased trading activity, possibly due to a significant event, earnings release, or market movement.
2. Implications of Volume Increase
- Increased Volume: A spike in volume often accompanies significant price movements. If the volume increase is accompanied by a price rise, it could indicate strong buying interest and potential upward momentum. Conversely, if the price is falling, it could signal panic selling.
- Breakout Potential: High volume can also indicate a potential breakout from a consolidation phase. If the stock has been trading in a tight range, a volume spike could precede a significant move in either direction.
Price Performance Context
1. Recent Performance
- 07 Mar 2025: The volume spike around this date suggests that the stock may have experienced a significant price movement. Given the recent 13.2% increase from last monthās close (as per previous analysis), it is likely that the volume spike corresponds to a price rally.
2. Long-Term Trends
- 2021 to 2023: The stable volume during this period suggests that the stock was in a consolidation phase, with no major price movements. This is typical for stocks that are building a base before a potential breakout.
- 2023 to 2025: The increase in volume towards the end of the period suggests that the stock may be breaking out of its consolidation phase, potentially entering a new trend.
Conclusion
Data Patterns India has shown a significant increase in volume around 07 Mar 2025, which could indicate a potential breakout or a significant price movement. The stockās recent 13.2% increase from last monthās close suggests that the volume spike is likely associated with a price rally.
Key Takeaways:
- Strengths: Increased trading activity and potential breakout from a consolidation phase.
- Weaknesses: Lack of explicit price data makes it difficult to confirm the nature of the volume spike.
- Opportunities: A confirmed breakout with high volume could lead to further upside.
- Threats: If the volume spike is associated with a price drop, it could indicate strong selling pressure.
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Final Conclusion
Data Patterns (India) Limited remains a strong player in the defense and aerospace sector. Despite some short-term challenges, the companyās robust order book, R&D investments, and international expansion position it for long-term growth. Investors should monitor execution timelines, cash flow management, and market expansions for sustained profitability. Investors should monitor the stockās price and volume trends closely. If the stock confirms a breakout with high volume, it could present a buying opportunity. However, caution is advised until the price action is confirmed. For long-term investors, the stockās strong fundamentals and growth prospects make it an attractive option, but short-term traders should be prepared for potential volatility.
Key Takeaways: ā Strong order pipeline ensures revenue visibility. ā High EBITDA and gross margins indicate cost efficiency. ā Technical indicators suggest a possible rebound. ā ļø Investors should watch valuation ratios before making decisions.
Disclaimer: This analysis is based on the Q3 FY ā25 earnings conference call transcript, Q3 FY ā25 investor presentation, Annual Report 2023-24, Fundamental and Technical Analysis of Data Patterns (India) Limited, and is intended for informational purposes only. It should not be construed as investment advice. Please consult with a financial advisor before making any investment decisions.
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