Global investment bank Jefferies maintained its ‘Buy’ rating on Data Patterns (India), with a price target of Rs 5,545 apiece. This implies an upside of nearly 38% from Tuesday’s closing price of Rs 4,025.
The company’s September quarter numbers missed Jefferies estimates, but a good order book and export opportunities provide a better outlook, as per them.
The company’s consolidated net profit plunged around 56% year-on-year (YoY) to Rs 21.82 crore for the September quarter. Its revenue from operations reported fell 57% YoY to Rs 133 crore for the quarter.
Data Patterns reported an earnings before interest, tax, depreciation, and amortisation of Rs 31.13 crore for the quarter, down 54% YoY, while EBITDA margin expanded to 23.41%.
The company’s EBITDA for the September quarter was 61% below Jefferies’ estimates, with revenue and margins also missing expectations.
The company needs a revenue growth of 66-75% YoY in the second half of FY27 to meet its yearly guidance, with a strong order book providing visibility ahead. The company retained its FY27 revenue growth guidance of 20-25% despite the sharp fall in the first half.
Data Patterns’ management highlighted that they are expecting another Rs 1,500 crore to Rs 2,000 crore orders in FY27, over and above the orders already received worth Rs 2,000 crore. The company’s order book is 49% from radars, with the balance split between AMC, avionics, EW, automated testing equipment, among others, Jefferies said.
The company expects to win more precision approach radar (PAR) contracts and is seeing inquiries for prototype development of modern radar components and subsystems in Europe, which could translate to large business volumes in the coming years, Jefferies said.
It is also looking to expand into avionics and sensors for civil aviation applications. Data Patterns is investing in in-house development of counter drones and satellite systems which also have export potential.
“Data Patterns started with sub systems exports and in Sept 2025 Qtr last year, the company delivered a fully developed Precision Approach Radar (PAR) system to Europe, highlighting that this should open the doors for further export contracts,” the global investment bank said.
Jefferies’ price target of Rs5,545 values the company at 65 times one-year forward price-to-earnings, which is at a 20% discount to its peak since listing in December 2021.
“2.4x rise in absolute profits over FY26-30E, 18%+ ROE and debt-free B/S with in-house technology in a growing defence pie should keep valuations elevated,” it said.
Jefferies sees obsolescence of the company’s technology and a lack of management bandwidth as key downside risks.
While September quarter numbers were below estimates, several major orders are in the pipeline for the year, which should help the company meet its FY27 revenue guidance. “Earnings delivery on existing order book with clarity on margin trajectory, with each passing result helping the stock move higher from current levels,” Jefferies said.