Summary
Data Patterns (India) Limited - Q3 FY 2026 Earnings Call Summary Friday, February 06, 2026, 09:15 A.M. IST
Event Participants
Executives 2 S. Rangarajan (Chairman & Managing Director), Venkata Subramanian (Chief Financial Officer)
Analysts 8 Akshay Jogani, Aman Soni, Aman Vij, Amit Dixit, Dipen Vakil, Hardik Rawat, Jayakanth Kasthuri, Jyoti Gupta, Nishant Chowhan, Santhosh, Shirom Kapur, Vikas Desai, Vishal Seth
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Order Book | ₹1,868 crores | All-time high; includes healthy mix of development and production orders. |
| Order Inflow (Negotiated) | ~₹1,100 crores | Orders negotiated but not yet awarded; expected to be signed within 1-2 months. |
| Revenue (Q3 FY26) | ₹173 crores | +48% YoY; driven by improved execution across defence programs. |
| Revenue (9M FY26) | ₹580 crores | +86% YoY; reflects significant scale-up in operations. |
| EBITDA (Q3 FY26) | ₹78 crores | +44% YoY; margins sustained at a healthy 44%. |
| PAT (Q3 FY26) | ₹58 crores | +31% YoY; translated to a net profit margin of 34%. |
| Working Capital | 340 days | -88 days from 428 days in March; management targets 270-300 days over 3-5 years. |
| Export Order Book | ₹63 crores | Steady momentum; accounts for ~10% of quarterly revenue with focus on UK and US. |
Geographic & Segment Commentary
- Domestic Defence: Revenue grew 86% in 9M FY26, driven by production orders (57%) and development (37%). Strategic focuses include electronic warfare suites for ECIL/MoD and co-development with Bharat Forge for the AMCA (Advanced Medium Combat Aircraft) program.
- Exports: Currently contributes ~10% of revenue with a ₹63 crore order book. Management is targeting the European and US markets for avionics and system upgrades, leveraging lower development costs and faster turnaround times compared to global OEMs.
- Product Segments: Deep focus on Radar, Electronic Warfare (EW), Seekers, and Avionics. The Brahmos seeker trials are complete, with production orders expected to commence in FY27.
Company-Specific & Strategic Commentary
- Shift to Full Systems Provider: Transitioning from a subsystem supplier to a full systems solution provider. The company is investing in in-house IP for smart cockpits, infrared search and track (IRST), and missile approach warning systems for LCA Mark 2.
- IP-Led High Margins: High EBITDA margins (44-46%) are attributed to in-house design of building blocks rather than importing them. Revenue expenses for development are written off in the year of development, supporting gross margin expansion during production phases.
- Ecosystem Partnerships: Shortlisted as one of three entities for the AMCA production RFP in partnership with Bharat Forge. Also collaborating with international majors for co-development of solutions aimed at both Indian and global markets.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Revenue Growth | 20% - 25% (Medium Term) | Supported by record order book and massive TAM expansion in indigenized defence electronics. |
| Order Inflow | ₹1,600+ crores (Q4 FY26) | Includes ₹1,100cr negotiated orders plus ₹500-600cr in expected new contracts. |
| Seeker Production | Start FY 2026-27 | Brahmos seeker trials completed; awaiting formal production orders for series delivery. |
| EBITDA Margins | Sustain ~40%+ | Range remains dependent on mix of in-house IP-led products vs. system integration projects. |
Risks & Constraints
| Risk | Context |
|---|---|
| Working Capital Intensity | Currently high at 340 days due to long development cycles and government payment milestones. Relief is expected as production orders scale. |
| Order Timing | Business is entirely government-driven; process delays in contract signing or product acceptance can lead to quarterly revenue volatility. |
| Execution Risk | Large-scale programs like Sukhoi-30 upgrades and AMCA involve complex certification and integration cycles that are not entirely within the company’s control. |
Q&A Highlights
Order Pipeline & Inflow
- Question: Clarification on the ₹1,100 crores negotiated orders and their timeline. (Hardik Rawat)
- Answer: These are mostly document-stage finalizations for core competency products, including airborne applications. Signing is expected within 1-2 months. (S. Rangarajan)
Margins Sustainability
- Question: How are 46% EBITDA margins achieved and sustained? (Amit Dixit)
- Answer: High margins stem from designing building blocks in-house rather than integrating imported components. While integration-heavy contracts (e.g., those involving vehicles) may lower margins, IP-driven products remain highly accretive. (S. Rangarajan)
Brahmos & Seeker Business
- Question: Update on seeker trials and production orders. (Dipen Vakil)
- Answer: Trials for Brahmos are complete. A second high-band seeker for missile-to-missile applications is in advanced development. Production orders for Brahmos seekers are anticipated starting FY27. (S. Rangarajan)
Cash Flow & Receivables
- Question: Why is the cash balance at an 8-quarter low? (Hardik Rawat)
- Answer: Large development contracts are in final acceptance stages. Significant collections (recharging the “cash battery”) are expected within the next 3-4 months. (S. Rangarajan / Venkata Subramanian)
Key Takeaway
Data Patterns delivered a robust 9M FY26 performance with 86% revenue growth and an all-time high order book of ₹1,868 crores. The company is successfully pivoting from a component supplier to a strategic systems provider, evidenced by its shortlisting for the AMCA program and its completion of Brahmos seeker trials. Financial health remains strong with 44% EBITDA margins, though working capital remains high at 340 days due to development-heavy cycles. Management remains confident in a 20-25% medium-term growth trajectory, supported by a ₹15,000-20,000 crore addressable market in indigenous radars, electronic warfare, and seekers. The focus remains on IP-driven profitability over pure top-line volume, with a clear roadmap for international expansion as Indian content becomes increasingly competitive on the global stage.
Want more insights like this?
Subscribe to get deep dives delivered to your inbox.
More Earnings Summaries
Explore more Q3 FY26 earnings call analyses: