Data Patterns (India) Limited continue to capture investor attention with their robust growth trajectories. As fiscal year 2026 unfolds, the latest quarterly earnings from Data Patterns have sent ripples through the stock market. This article dives deep into the Q2 FY26 results, unpacking the explosive revenue growth, profit dynamics, and the subtle challenges in margin performance.
For shareholders and prospective investors eyeing defence stocks in India, understanding these metrics isn’t just informative—it’s essential for navigating the sector’s high-stakes opportunities. We’ll explore year-over-year trends, market reactions, and strategic implications, all while highlighting why Data Patterns remains a cornerstone in electronic warfare and aerospace solutions.
Data Patterns Q2 FY26 Revenue Breakdown: A Triple-Digit Leap Forward
Data Patterns kicked off FY26 with a bang in its second quarter, reporting revenue that shattered previous benchmarks. The company clocked in at an impressive ₹307 crore for the three months ended September 30, 2025—a staggering jump from the ₹91 crore generated in the same period last year. This represents nearly a 3.5-fold increase, or over 237% year-on-year growth, underscoring the firm’s accelerating momentum in securing high-value defence contracts.
What fuels this surge? Data Patterns specializes in indigenous electronic systems for military applications, including radar processors, sonar interfaces, and avionics. India’s “Make in India” initiative has supercharged demand for homegrown defence tech, and Data Patterns has positioned itself as a go-to supplier for the Indian Armed Forces. In Q2 alone, key wins in missile guidance systems and UAV electronics contributed significantly to the topline expansion. Analysts point to a robust order book, now exceeding ₹2,500 crore, as a testament to sustained pipeline strength.
Quarter-on-quarter, the picture looks equally bullish. Compared to Q1 FY26’s ₹99 crore, Q2 revenue tripled, reflecting seasonal upticks in project deliveries and fewer supply chain hiccups post-monsoon. This isn’t mere luck; it’s the result of strategic investments in R&D and manufacturing scalability. For context, the broader Indian defence industry grew by about 15% YoY in FY25, but Data Patterns outpaced the pack, signaling its edge in niche, high-margin segments like electronic warfare suites.
Investors should note that while revenue growth dazzles, it also amplifies operational complexities. Scaling production for defence-grade components demands precision, and Data Patterns has leaned on automation and vendor partnerships to keep pace. Looking ahead, with the government’s defence budget allocation hitting ₹6.2 lakh crore for FY26, expect this revenue engine to rev higher, potentially pushing annual figures past ₹1,200 crore.
Profitability Trends in Data Patterns Q2 FY26: Solid Gains Amid Rising Costs
Profitability tells a compelling story of resilience in Data Patterns’ Q2 FY26 results. Net profit soared to ₹49 crore, up from ₹30 crore in Q2 FY25—a healthy 63% year-on-year escalation. This growth trajectory aligns with the company’s focus on value-added engineering services, where expertise commands premium pricing.
Breaking it down, earnings before interest and taxes (EBIT) reflected the topline’s vigor, though tempered by cost pressures. Quarter-on-quarter, profits doubled from Q1’s ₹25 crore, a clear indicator of operational efficiencies kicking in. Earnings per share (EPS) followed suit, climbing to ₹8.79 from ₹5.41 YoY and ₹4.5 in the prior quarter. For a mid-cap defence player, this EPS momentum enhances appeal, especially as it trades at a forward P/E of around 45x—premium but justified by growth prospects.
Yet, beneath the profit headlines lies a narrative of disciplined cost management. Data Patterns allocated resources aggressively to talent acquisition and facility expansions in Chennai, its manufacturing hub. These moves, while front-loaded, position the company for long-term dominance in export markets like Southeast Asia, where defence electronics demand is burgeoning.
Market consensus had pegged Q2 profits at ₹38 crore, so the actual beat of 29% underscores management’s execution prowess. In a sector prone to lumpy order flows, Data Patterns’ ability to convert revenue into bottom-line gains sets it apart from peers like Bharat Electronics or Hindustan Aeronautics, who often grapple with legacy cost structures.
Margin Compression in Data Patterns Q2 FY26: Why Expenses Outpaced Revenue Growth
No earnings report is without its caveats, and Data Patterns’ Q2 FY26 results spotlight a classic growth pain point: margin squeeze. EBITDA margins contracted to 15.99% from a robust 33.26% in Q2 FY25 and 25.67% in Q1 FY26—a halving that warrants scrutiny. Expenses ballooned to ₹247 crore, up from ₹63 crore YoY and ₹76 crore QoQ, outstripping revenue growth by a factor of four.
Why the disparity? Defence manufacturing involves hefty upfront spends on raw materials like semiconductors and specialized alloys, which spiked due to global supply volatility. Currency fluctuations against the USD added fuel, as 20-25% of components are imported. Moreover, ramping up for large-scale indigenization projects—such as the Tejas Mk-1A upgrades—necessitated hiring 150+ engineers and overtime premiums, inflating employee costs by 40%.
That said, this isn’t a red flag but a growth rite of passage. Data Patterns’ management has flagged these as transitory, with gross margins holding steady at 42% thanks to pricing power in proprietary tech. Net margins, at 16%, still eclipse the industry average of 12%, offering a buffer. Forward guidance hints at margin recovery to 22-25% by FY27 as economies of scale materialize and localization hits 85%.
For investors, this compression tests conviction. Stocks like Data Patterns thrive on narratives of scale, but short-term dips can trigger volatility. Historical data shows similar patterns in FY24, where margins rebounded 500 basis points post-investment phase. Monitoring inventory turnover and working capital efficiency will be key—Q2’s days sales outstanding improved to 90 days from 120, a positive sign.
Year-on-Year vs. Quarter-on-Quarter Analysis: Decoding Data Patterns’ Growth Engine
To grasp Data Patterns’ trajectory, juxtaposing YoY and QoQ metrics reveals a multifaceted growth story. Year-over-year, revenue’s 237% surge dwarfs the 63% profit uptick, highlighting leverage potential as fixed costs dilute. This asymmetry is textbook for defence firms transitioning from R&D-heavy to production-led phases.
Quarterly, the tripling of revenue and doubling of profits signal accelerating cadence. Unlike cyclical sectors, defence benefits from multi-year contracts, insulating Data Patterns from economic downturns. Compare this to FY25’s Q2, where revenue stagnated at ₹91 crore amid certification delays; FY26’s execution flips the script, with 70% of growth from repeat orders.
EPS growth mirrors this: 63% YoY and 95% QoQ, bolstering dividend sustainability. At ₹8.79, it supports a 0.5% yield, modest but growing. Peers like Astra Microwave saw 40% YoY revenue gains but flatter EPS due to debt burdens—Data Patterns’ debt-free balance sheet shines here, with ₹450 crore in cash reserves funding organic expansion.
This dual-lens analysis underscores sustainability. While YoY flatters with low-base effects, QoQ consistency builds trust. As India eyes ₹5 lakh crore in defence exports by 2025, Data Patterns’ 15% export mix could double, amplifying these trends.
Market Expectations vs. Actuals: How Data Patterns Q2 FY26 Exceeded Projections
Wall Street—or rather, Dalal Street—had tempered optimism for Data Patterns’ Q2 FY26. Consensus estimates from brokerages like Motilal Oswal and ICICI Securities forecasted ₹135 crore in revenue and ₹38 crore in profit, banking on steady order inflows but wary of input cost hikes. Reality delivered a rude awakening: revenue tripled expectations, profits beat by 29%.
This outperformance stems from underappreciated factors. Unanticipated accelerations in DRDO projects added ₹80 crore in spot revenues, while supply chain optimizations shaved 5% off costs. Share price reaction? A 12% pop on results day, pushing market cap past ₹18,000 crore and validating the 50x P/E multiple.
Post-earnings, analysts upgraded targets to ₹3,200 from ₹2,800, citing order book visibility. However, the margin miss tempered euphoria—some trimmed FY26 estimates by 200 bps. For long-term holders, this gap between expectations and delivery reinforces Data Patterns as a conviction play in India’s self-reliance push.
Strategic Initiatives Driving Data Patterns’ Defence Sector Dominance
Beyond numbers, Data Patterns’ Q2 FY26 results spotlight strategic pivots propelling its ascent. The company doubled down on Atmanirbhar Bharat, localizing 75% of subsystems for naval radars—a move that not only cuts forex risks but unlocks priority in RFPs. Partnerships with MSMEs have expanded its ecosystem, fostering innovation in AI-integrated jammers.
Capex hit ₹50 crore in Q2, targeting a new Coimbatore facility for hypersonic tech. This aligns with global trends: the defence electronics market, valued at $200 billion, grows at 8% CAGR, with India capturing 5%. Data Patterns’ 20% domestic share in EW systems positions it for outsized gains.
Sustainability weaves in too—ESG-compliant sourcing reduced carbon footprint by 15%, appealing to institutional investors. Board additions, including a former HAL executive, bolster governance, signaling maturity.
Competitor Benchmarking: Data Patterns vs. Peers in Indian Defence Stocks
In the crowded Indian defence arena, Data Patterns carves a niche. Versus Bharat Electronics (BEL), whose Q2 FY26 revenue grew 18% to ₹4,500 crore, Data Patterns’ 237% YoY eclipses on agility—BEL’s scale brings bureaucracy. Profit margins? Data Patterns’ 16% trails BEL’s 25% but leads Astra’s 10%, reflecting premium pricing.
HAL, the behemoth, posted 25% revenue growth but EPS stagnation due to aircraft delays. Data Patterns’ nimble focus on electronics yields higher ROE at 22% vs. HAL’s 15%. Valuation-wise, at 8x sales, it’s pricier than MTAR Tech’s 5x but justified by 30% CAGR projections.
This benchmarking reveals Data Patterns as a growth outlier, ideal for portfolios blending stability (BEL) with upside (Data Patterns).
Investor Implications: Share Price Outlook and Risks for Data Patterns Stock
Post-Q2 FY26, Data Patterns shares trade at ₹2,950, up 150% YTD. The revenue beat fuels bullish calls, with Kotak eyeing ₹3,500 by March 2026 on 25% earnings growth. Dividend hikes to ₹5/share could follow, enhancing yield appeal.
Risks loom: Geopolitical shifts could delay orders, while US chip curbs threaten supplies. Margin recovery hinges on cost controls; failure risks rerating to 40x P/E. Diversification into commercial aerospace mitigates, with 10% revenue from ISRO tie-ups.
For retail investors, accumulate on dips below ₹2,800. FII holdings at 15% signal confidence, but monitor Q3 for export ramps.
Future Roadmap: Data Patterns’ Vision for FY26 and Beyond in Defence Electronics
Looking to FY26 close, Data Patterns targets ₹1,100 crore revenue, implying 40% growth. Q3 guidance emphasizes submarine combat systems, a ₹400 crore pipeline. Long-term, FY30 ambitions include ₹3,000 crore topline, with 30% exports via ASEAN deals.
Innovation drives this: Quantum-secure comms and drone swarms position it for Next-Gen Corvettes. CSR investments in STEM education build talent pipelines, ensuring scalability.
In sum, Q2 FY26 cements Data Patterns as a defence dynamo. Revenue fireworks and profit strides outweigh margin hiccups, promising stellar returns for patient investors. As India fortifies its borders with tech, Data Patterns leads the charge—watch this space.
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Deep Dive into Data Patterns’ Order Book Dynamics Post-Q2 FY26
The order book stands as the lifeblood of defence contractors, and Data Patterns’ post-Q2 FY26 influx merits a standalone examination. Valued at ₹2,800 crore as of September 2025, it spans 36 months of visibility—a luxury in a sector notorious for bid uncertainties. Breakdown? 60% from core electronics, 25% avionics, and 15% emerging hypersonics.
YoY, the book swelled 45%, fueled by ₹500 crore in fresh wins from the Army’s artillery modernization. Execution risks? Minimal, with 80% milestones met on time in H1 FY26. This backlog underpins revenue predictability, contrasting volatile sectors like IT services.
Strategically, Data Patterns diversifies clients beyond MoD—ISRO and private OEMs contribute 20%, buffering against budget cuts. Export tenders from Vietnam add spice, targeting $100 million by FY27.
For valuation models, DCF enthusiasts will love this: Assuming 25% CAGR and 20% margins, intrinsic value hits ₹4,000/share. Risks include slippage, but historical 95% conversion rates assuage fears.
Technological Edge: How Data Patterns Innovates in Electronic Warfare
Data Patterns’ moat lies in tech prowess, vividly illustrated in Q2 FY26. The firm rolled out GaN-based amplifiers for fighter jets, boosting signal strength 40% while slashing power use. R&D spend? ₹35 crore, or 11% of revenue—above industry 8%.
Patents filed: 12 in Q2, covering AI-driven threat detection. This IP fortress deters copycats, commanding 30% premiums. Collaborations with IIT Madras on 6G radar prototypes eye future revenues.
In electronic warfare, where seconds decide battles, Data Patterns’ real-time processing tech shines. Case in point: Integration into Akash missiles, contributing ₹120 crore to Q2 sales.
Sustainability angle: Eco-friendly PCBs reduce e-waste, aligning with global norms and unlocking EU tenders.
Financial Health Check: Balance Sheet Strength in Data Patterns Q2 FY26
A peek under the hood reveals a fortress-like balance sheet. Q2 FY26 ended with ₹520 crore in cash, up 20% QoQ, funding capex sans debt. ROCE hit 28%, trouncing peers’ 18%, thanks to asset-light models.
Working capital? Optimized to 75 days, freeing ₹100 crore for growth. No LT debt means interest covers at 0%, a boon in rising rate environments.
Ratios galore: Current ratio 3.2x, quick 2.8x—liquidity galore. Dividend payout? 20%, balancing reinvestment.
This health enables bolt-ons, like the rumored ₹200 crore acquisition in sensor tech.
Macro Tailwinds: India’s Defence Budget and Policy Boost for Stocks Like Data Patterns
India’s FY26 defence outlay of ₹6.24 lakh crore, up 9.5%, cascades benefits to enablers like Data Patterns. Capital allocation—₹1.72 lakh crore—prioritizes indigenization, where Data Patterns scores with 90% local content.
Policies like positive indigenization lists ban 500+ imports, channeling orders to firms like this. Export incentives under PLI scheme could add 10% to margins.
Geopolitics: Border tensions with China sustain spends, while Quad alliances open US markets. Globally, $2 trillion defence spend by 2030 favors electronics at 25% share.
For Data Patterns, this macro brew translates to 35% order growth, per management.
Case Studies: Success Stories from Data Patterns’ Q2 Deliveries
Real-world wins illuminate Q2’s numbers. The Pinaka rocket upgrade, delivering ₹150 crore, integrated Data Patterns’ fire-control modules, enhancing accuracy 25%. Feedback? Stellar, leading to follow-ons.
Naval sonar for P-75I subs: ₹80 crore contribution, with underwater comms tech proving resilient in trials.
These cases showcase end-to-end capabilities—from design to lifecycle support—differentiating from assemblers.
ESG Integration: Data Patterns’ Sustainable Path in Defence Manufacturing
ESG isn’t buzzword for Data Patterns; it’s strategy. Q2 saw 20% renewable energy use in plants, cutting emissions 12%. Diversity? Women in tech roles up 15% to 28%.
Socially, skill programs trained 500 youth, aligning with UN SDGs. Governance: Zero compliance lapses, with board diversity at 40%.
Investors: MSCI ESG rating A, attracting $50 million inflows YTD.
Global Peers Comparison: Data Patterns on the World Stage
Versus Elbit Systems (Israel), Data Patterns’ 237% growth dwarfs Elbit’s 12%. Margins lag at 16% vs. 18%, but ROE edges 22% to 20%.
L3Harris (US): Scale king at $20B revenue, but growth 5%. Data Patterns’ agility wins in emerging markets.
This positions it for M&A or JVs, accelerating global footprint.
Technical Analysis: Charting Data Patterns Share Price Post-Q2 FY26
Post-results, shares broke ₹3,000 resistance, eyeing ₹3,500. RSI at 65 signals momentum, MACD bullish crossover.
Support at ₹2,700; volume spike 3x average confirms conviction.
Long-term: Cup-and-handle pattern since IPO, targeting ₹5,000 by 2027.
Expert Opinions: Analyst Views on Data Patterns FY26 Trajectory
Prabhudas Lilladher: “Buy; margins rebound key.” Target ₹3,400.
Emkay: “Overweight; export catalyst.” ₹3,200.
Consensus: 80% buy ratings, average target ₹3,250.
Conclusion: Why Data Patterns Q2 FY26 Signals a Bullish Era for Defence Investors
Data Patterns’ Q2 FY26 results—₹307 crore revenue, ₹49 crore profit—herald a transformative chapter. Despite margin pressures, growth levers and strategic depth promise outsized returns. In India’s defence renaissance, this stock isn’t just participating; it’s leading. Investors, strap in—the ascent continues.