Data Patterns Q4 Review: Jefferies Hikes Target Price, Sees Medium-Term Growth Story

Jefferies has issued a positive outlook on Data Patterns Ltd. following the company's fourth-quarter earnings. The brokerage has raised its target price, reflecting confidence in the company's growth trajectory and financial performance. The target price has been hiked to Rs 3,400 from Rs 2,690.

Data Patterns' fourth quarter net profit jumped by 60.5%, reaching Rs 114 crore, compared to Rs 71 crore year-on-year. Revenue also saw an increase, rising to Rs 396 crore from Rs 182 crore year-on-year. The Ebitda grew by 60.7%, amounting to Rs 149.5 crore versus Rs 93 crore. However, the margin decreased to 37.7% from 51%.

According to Jefferies, Data Patterns delivered a 23% Ebitda beat, with Ebitda up over 60% year-over-year, driven by a 117% revenue growth.

This, even as orders were down 48% year-on-year. "Management highlighted there have been ordering delays, which should be made up in FY26," Jefferies said.

The company has provided strong guidance for FY26, with expected orders of Rs 1,000 crore to 1,500 crore, representing a 3-4 times year-on-year increase. "We raise our fiscal year 2026-2027 estimated earnings per share by 3-10% and retain Buy, given the strong 20-25% medium-term growth story is in place."

The management maintained its medium-term 20-25% revenue guidance and 35-40% margin profile, it noted.

Fiscal 2025 Ebitda margins were down 380 basis points year-on-year to 38.8%. Management indicated that certain contracts were taken on lower margins to build competencies, pointing to larger medium-term growth prospects. "73% of FY25 orders is in production, which tends to have better margins than development," Jefferies highlighted.

While the focus remains on domestic markets, there is excitement about export opportunities. "Potential discussion with a company for manufacturing radars or seekers for selling globally is a potential meaningful contributor ahead if it materialises," Jefferies said.