Data Pattern Q1 FY26 Earnings Analysis

- Company anticipates strong revenue growth of 20% to 25% for FY '26. - Order book as of March 31, 2025, stands at INR 730 crores; including negotiated contracts, INR 860 crores. - Expects order inflow to ramp up significantly in FY '26. - Production and service business contribution to revenue projected to increase from ~55% to over 70% in 2-3 years. - Long-term total addressable market (TAM) estimated between INR 20,000 to 30,000 crores in defence electronics and systems. - Growth driven by repeat orders, emergency procurements, new product developments (radars, seekers, EW systems). - Focus on building integrated system competencies to capture larger contracts and scale revenue. - Targets maintaining sustainable EBITDA margins between 35%-40% alongside growth. - Transition from development-heavy to production-heavy business expected to improve working capital and cash flow over next 2-3 years.

- Data Patterns expects revenue growth of 20-25% for FY '26, consistent with prior guidance. - Operating (EBITDA) margins are anticipated to be sustained between 35-40%. - Bottom line (PAT) growth guidance is maintained at around 20% annually. - While 30% bottom line growth is possible, it is not the current official guidance. - The company plans significant capital expenditure (~INR150 crores) over 1-2 years to boost infrastructure for production and testing. - Continued R&D investments (>INR140 crores already spent in past 1.5 years) support longer-term growth through new product development. - Growth will be driven by scaling production business to 70%+ of revenue from the current ~55%, as product development matures. - Improved cash flows and working capital efficiency expected over 2-3 years as projects transition from development to production phase.

- The company is investing approximately INR150 crores in capital expenditure over the next 1 to 2 years. - This CAPEX is aimed at creating infrastructure for production, testing, and validation of systems, anticipating contracts in the next 2 to 3 years. - This infrastructure build-up is to ensure readiness for delivery and scaling up as product developments mature. - R&D expenditure has already seen over INR140 crores spent in the last 1.5 years on product development, with continued investments planned. - These investments support moving from component supply to full-system solutions, enhancing engineering and design capabilities with a workforce of around 1,100 engineers. - The strategic focus includes building competencies to produce new-age defense products like radars, secure communication systems, and seekers in-house.

- Data Patterns has not indicated any current plans for fundraising through debt. - The company remains a zero-debt entity as of FY '25 and is managing operations without debt. - There was mention of raising capital through QIP (Qualified Institutional Placement) earlier to fund R&D, but this was in the past. - The INR150 crore expenditure planned over the next 1-2 years is for capital expenditure (infrastructure, production, testing) funded internally, not through new fundraising. - No explicit mention or guidance on future fundraising through equity or debt was provided in the latest discussions. - The company is focusing on scaling through internal cash flows, with a strong cash position of over INR453 crores as of March 31, 2025.

- As of March 31, 2025, the order book stood at INR 730 crores. - Including negotiated but yet-to-be-received contracts, the order book as of date is INR 860 crores. - International order book as of March 31, 2025, is INR 107 crores. - More than 70% to 80% of existing orders are expected to be executed within the current year. - Some portion of new orders expected in the current year may also be executed in the same year. - The company anticipates order inflows in FY '26 between INR 1,000 crores to INR 2,000 crores. - Orders delayed from FY '25 are expected to materialize in FY '26, contributing to this pipeline. - Repeat orders and emergency procurement contracts are key contributors to expected order inflows. - Work on procurement and design for expected contracts has already started as a proactive measure.