Data Patterns (India) Limited: Growth, Outlook & Key Advancements || from management’s conference call

Expansion of Addressable Market
- Increasing market size from ₹10,000 crores to ₹20,000 crores by developing new products.
- Transitioning from subsystem supplier to complete system supplier to bid for large-scale projects.
Increased R&D Investments
- Heavy focus on indigenous product development in:
  - Radars
  - Electronic Warfare (EW) suites
  - Software-Defined Radios (SDRs)
- New products to be showcased at Defence Expo in February 2025.
Strategic Focus on Export Markets
- Expanding business in Europe and East Asia to compete with global OEMs.
- Strengthening exports in avionics and radars.
- Setting up a dedicated international marketing organization.
Order Book & Revenue Growth
- Order book: ₹1,095 crores (as of December 2024).
- Revenue growth target: 20%-25% for FY25.
- Targeting ₹2,000 to ₹3,000 crores in new orders over the next 18 months.

Improving Execution & Reducing Inventory
- Addressing delays in order execution.
- Large radar and avionics contracts expected to be delivered in the next 1-2 quarters.
Benefiting from Increased Defence Budget
- Indian defence budget for FY25-26 increased by 9.5%.
- ₹1.8 lakh crores allocated for modernization with 75% reserved for indigenous procurement.
Strengthening International Business
- Investing in export-focused infrastructure and a highly skilled engineering workforce.
- Partnering with global OEMs for long-term avionics and radar contracts.
Scaling Workforce & IT Infrastructure
- Expanding workforce beyond 1,500 employees, including 1,000 engineers.
- Implementing PLM and ERP systems for improved operational efficiency.

Delayed Defence Orders & Bureaucratic Processes
- Some orders expected in FY24 shifted to FY25, impacting revenue projections.
Inventory & Working Capital Management
- Higher inventory levels due to large radar projects.
- Inventory levels expected to normalize by Q1/Q2 FY26.
Competition from Global OEMs & DPSUs
- Competing with large defence PSUs like BEL and HAL for government contracts.
- Facing strong competition in international markets from established defence OEMs.
Revenue Predictability & Order Conversion
- Defence contracts have long gestation periods (3-5 years), affecting short-term revenue visibility.
- Diversifying revenue mix with steady long-term export contracts.

Electronic Warfare & Radar Systems
- Secured ₹80 crore EW production order and ₹53 crore radar production order in Q3 FY25.
- Developing next-generation radars for defence applications.
Expansion in Avionics & Aerospace
- Successfully executing avionics export contracts for European customers.
- Exploring opportunities in satellite & space-based surveillance, but proceeding cautiously.
Indigenous Product Development
- ₹85-88 crores invested from QIP funds into:
  - Software-defined radios (SDRs).
  - Next-generation radars.
  - EW systems.
  - Make-in-India defence projects.
- Positioning Data Patterns as a key supplier in Indian and international defence markets.

Data Patterns is executing a strong growth strategy focused on:
- Product innovation.
- Exports expansion.
- Operational scale-up.
Short-term challenges include order delays and inventory buildup, but long-term fundamentals remain strong.
By expanding its addressable market, investing in R&D, and securing international contracts, Data Patterns is well-positioned for sustained growth in the Indian & global defence sector.

Spread the love