Data Patterns way Ahead
Data Patterns is among the few vertically integrated defense and aerospace electronics solution provider catering to the indigenously developed defense products and the core competency lies in self‐built radars, electronic warfare (EW), avionics, other electronics for aircraft, underwater communication, and many others. From a supplier to the manufacturer of sub‐systems for satellites, the company now evolved into a manufacturer of satellites with in‐house design and development capabilities.
Data patterns’ design and build capabilities across the entire spectrum of strategic defense and aerospace electronics solutions are at competitive prices and its ability to partner with customers through the life cycle of a product, from conception to deployment will help the company leverage its operating efficiencies in the coming years.
The management of the company expressed that it is currently looking at making large satellites after successfully delivering the nano satellites. It also wants to be an equipment supplier as almost everything in the sector is imported from India.
The company works on the competency model, where products are created ahead of the market requirement in its facilities. Also, the company meets its own raw material demands by making components in‐house. Its industrial know-how and technological capabilities will enable the company in making the components and equipment needed in the industry.
As of Q4FY22, the order book stands at Rs.4.8 billion (1.5x FY22 revenues) comprising majorly of radars and electronic locks to be executed over 2 years. Of the total orders, development contracts jumped to 4‐fold constituting 52% of the total order book providing contracts visibility while 43% was constituted from production contracts.
Going ahead, Data patterns is looking at an order inflow of Rs. 20‐30 billion largely from radars, electronic warfare (EW), EW on ground systems – next-gen ground receivers.
The company is doubling its manufacturing facility in Chennai to 200,000sqft and is in the process of setting up additional SMT lines and testing infrastructure in FY23E.
On the working capital front, management indicated that there has been some improvement in collections led by operational efficiencies. The company has reduced its working capital cycle from 355 days in FY21 to 329 days in FY22 and is expected to reduce further.
As part of the indigenization process in the defense sector, the government has mandated that for any product bought, 50% of it should be value‐added in India.
This is a huge requirement, considering the current availability status in India, and becomes attractive for companies like Data patterns who build the equipment and the domain.
DisclaimerInvestment/Trading is subject to market risk, past performance doesn’t guarantee future performance. The risk of trading/investment loss in securities markets can be substantial. Also, the above report is compiled from data available on public platforms.
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