Data Patterns (India) shares took a sharp hit, tumbling over 7% following the release of its second-quarter results for FY25, which revealed a year-on-year decline in both revenue and profit. The defence electronics company cited order delays and slower-than-expected order inflow as key reasons behind the dip. Despite the setback, the stock remains a notable performer on a year-to-date basis, outperforming major indices like the Nifty 50.
Data Patterns shares drop following disappointing Q2 performance
At 10:40 AM on the day of the announcement, shares of Data Patterns traded over 4% lower, valued at ₹2,225 per share. The company, which has gained more than 21% this year, reported a 10% fall in net profit, bringing it down to ₹30.3 crore for the quarter.
Revenue from operations also declined by 16%, dropping to ₹91 crore. Investors with an interest in investing in stocks of technology-driven defence companies are observing Data Patterns closely following these developments.
Operational earnings see a decline; margins hold steady
Data Patterns’ operational EBITDA fell to ₹34.3 crore, down from ₹40.8 crore in the same quarter last year. However, the EBITDA margin remained steady at 37.7%, demonstrating some resilience despite the revenue decline.
The PAT margin improved slightly, rising to 33.3% from 31.2% in the corresponding period last year. For those looking to invest in stocks within the defence sector, Data Patterns’ consistency in margins might be a reassuring factor.
Order book updates and delayed deliveries impact Q2 revenue
The company reported an order book value of ₹1,053 crore, with potential negotiations that could increase this to ₹1,194.6 crore. The drop in quarterly revenue has been attributed to customer-requested delivery delays of completed products.
Data Patterns Chairman and Managing Director, Srinivasagopalan Rangarajan, noted, “Revenue for the quarter was impacted due to postponement of delivery schedule by the customer, of completed products. Our order inflow has been slower than anticipated in the first half, which we expect to pick up during the second half.” For those who invest in stocks, this projected order growth could signal potential recovery in the quarters ahead.
Specialisation in defence electronics provides growth opportunities
Data Patterns specialises in end-to-end defence electronics, spanning fields such as radars, electronic warfare, avionics, and small satellites. The company collaborates closely with major defence PSUs, including Hindustan Aeronautics Ltd and Bharat Electronics Ltd, and works alongside organisations like DRDO and ISRO.
The company’s capabilities in advanced electronics make it a strategic player within India’s defence industry, presenting a unique option for those considering where to invest in stocks with high potential growth.
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