Data Patterns (India) Limited

Results below, please verify numbers for yourselves and safety:

Results 31-Mar-23 31-Dec-22 31-Mar-22
Revenue 185 111.81 170
Other Income
PBT 72 44 84
PAT 54.46 33.27 60.35
EPS 10.49 6.42 12.77
Growth QonQ YonY
Revenue 65% 9%
Other Income
PBT 64% -14%
PAT 64% -10%
EPS 63% -18%
31-Mar-23 31-Dec-22 31-Mar-22
OPM 39% 39% 49%

and…

Results 31-Mar-23 31-Mar-22
Revenue 453 310
Other Income
PBT 164 127
PAT 122.98 92.82
EPS 23.8 19.48
Growth Full Year
Revenue 46%
Other Income
PBT 29%
PAT 32%
EPS 22%

and concall

https://www.datapatternsindia.com/investors/files/GON0220230515147083.mp3

and

presentation

and your thoughts?

2 Likes

IMO, this is the most important slide as I see Data Patterns to be a long term sectoral play.

Though the valuation is a bit expensive, the growth rate is sustainable with good order book visibility. Furthermore, the export potential is huge going forward. Currently only 10% of revenue is from exports.

Positives to look out for:

  • More value added products with increased sophistication
  • Increased client base

Sectoral tailwinds:

  • Commercialisation effort of Indian defense - govt is quite keen to improve the export fraction
  • Make in India - Particularly for defense, India wants to be self reliant

(haven’t listened to concall yet)

Disc: Invested 5% of my portfolio

5 Likes

Data Patterns diverse product range includes it products supplied for products like LCA-Tejas, Light Utility Helicopter, BrahMos missile.

I understand outlay from budget may be for various major defense products but Data Patterns product range diversification will always find its applications like Radars, Communication Systems, Electronic Warfare and Satellite.

Diverse Product Offerings.pdf (462.1 KB)

Disc:-Invested. Not an Reg. Advisor. No Recommendation.

1 Like

Though the fundamentals look strong and revenue growth prospects are there, the current stock valuations seem to account for a very high growth far into future.
If the PAT becomes 3x over next 5 years, the current valuation is still justifiable.

Few questions in my mind right now:

  • what is the revenue & PAT projection that is reasonable for Data Patterns? As per reverse DCF, something around 40% growth in PAT is priced in.
  • will their orderbook growth continue over to next few years?
  • will they be able to service their orderbook with their capacity additions?
  • is there more upside from a fundamental POV considering the current rich valuation?

Just putting this out as defence sector has run up a bit and we need to be cautious not to get caught in cycle peak / bubbles.

Disc: Invested

The ‘reserves’ increased to 2x from 546 cr in '22 to 1156 cr in '23; while the PAT increase was just 40cr.

During the same time outstanding shared increased by 8% i.e. 51.8mn shares to 55.9 mn shares.

Looking for some advice from accounting experts on what to conclude from this? how are reserves increasing so dramatically?

2 Likes

Whenever u raise money, shares of a company are issued at premium to face value.
The excess is Securities premium reserve which gets added in R&S

Hence if u see, all loss making companies like Zomato, paytm, reserves increased despite loss. it was due to the IPO/QIB/QIP that companies do.

hope that helps

4 Likes

Thanks @nikhil_chowdhary , appreciate the explaination.

I have a followup question, as the no. of shares is increasing through IPO/QIP/QIB etc the EPS growth might get impacted ? hypothetical example, if the PAT grows by 10% and same year company increase no. of shares by 10%, the EPS would remain constant inspite of the growth and hence minority shareholder doesnt get the full benefit of the growth?

Recent credit rating report

https://www.icra.in/Rationale/ShowRationaleReport?Id=123083

Data Patterns (India) Limited, a defense and aerospace electronics solutions provider, has reported significant growth in its financial results for Q2 FY 2023-24.







Key Highlights:

  • Total income for Q2-FY24 increased by 32% compared to the same period last year.
  • Revenue from operations in the same quarter increased by 23%.
  • Operational EBIDTA increased by 35%.
  • Profit Before Tax (PBT) improved by 61%.
  • Profit After Tax (PAT) also increased by 61%.

For H1 FY 2023-24:

  • Total revenue for the first half of the year increased by 38%.
  • Revenue from operations in the corresponding half-year period increased by 27%.
  • Operational EBIDTA increased by 33%.
  • Profit Before Tax (PBT) improved by 69%.
  • Profit After Tax (PAT) increased by 69%.

Additionally:

  • The company’s order book as of the date stands at INR 1003.27 Crores.
  • Orders negotiated but not yet received are at INR 78.78 Crores.
  • Including converted negotiated orders, the total order book reaches INR 1,082 Crores.

Mr. Srinivasagopalan Rangarajan, Chairman & Managing Director of Data Patterns (India) Limited, expressed satisfaction with the strong revenues and order inflow for Q2 and H1 FY24. The company is committed to further investments in product development to capitalize on the opportunities in the defense program run by the Government of India.

3 Likes