🔍 Observations
Topline
- FY26 revenue of ₹924.77 Cr vs ₹708.35 Cr in FY25 — 30.6% YoY growth, driven by execution ramp-up in defence electronics programmes.
- Q4 FY26 revenue at ₹344.85 Cr, down 12.9% vs Q4 FY25 (₹396.21 Cr) — sequential recovery from ₹173.13 Cr in Q3 FY26 confirms strong H2 skew in delivery schedules.
- Revenue concentration in H2 remains a structural trait; Q3+Q4 contributed ~56% of FY26 annual revenue.
Bottomline
- FY26 PAT of ₹271.37 Cr vs ₹221.81 Cr — 22.3% YoY growth, slightly below revenue growth pace due to higher employee costs and depreciation.
- Q4 FY26 PAT of ₹138.38 Cr vs ₹114.08 Cr in Q4 FY25 — 21.3% YoY growth; strong quarter-level profitability.
- FY26 EPS of ₹48.47 vs ₹39.62 — 22.3% YoY accretion; no dilution as share capital unchanged at ₹11.20 Cr.
Margins
- FY26 EBITDA (PBT + Finance costs + Depreciation): ₹363.54 + ₹12.45 + ₹22.95 = ₹398.94 Cr on revenue of ₹924.77 Cr → EBITDA margin: 43.1% vs FY25: (₹295.34 + ₹12.08 + ₹13.92) / ₹708.35 = 45.7% — 260 bps margin compression YoY.
- FY26 net profit margin: ₹271.37 / ₹924.77 = 29.3% vs ₹221.81 / ₹708.35 = 31.3% in FY25 — 200 bps compression.
- Employee cost as % of revenue: ₹154.26 / ₹924.77 = 16.7% vs ₹114.06 / ₹708.35 = 16.1% — controlled but rising, reflecting headcount build for future programmes.
Growth Trajectory
- 3-year revenue CAGR not computable from provided data; FY25-FY26 single-year growth of 30.6% is robust for a defence-focused manufacturing entity.
- PAT growth of 22.3% YoY — healthy in absolute terms, but trailing revenue growth signals a margin dilution phase, not a structural deterioration.
- Intangible assets under development rose from ₹36.28 Cr to ₹60.86 Cr — ongoing R&D capitalisation signals product pipeline investment ahead of next growth leg.
🧮 Profit & Loss Statement
🧮 Balance Sheet
🧮 Cash Flows Statement
🟢 Green Flags
- Debt-free balance sheet — zero borrowings (current and non-current) gives full financial flexibility and zero refinancing risk.
- 43.1% EBITDA margin — among the highest in Indian defence electronics; reflects proprietary IP-driven product mix, not commodity assembly.
- 30.6% revenue growth with sustained 29%+ net margins confirms pricing power and programme-level profitability.
- Operating cash flow turned positive: ₹80.15 Cr in FY26 vs negative ₹89.88 Cr in FY25 — working capital discipline improving meaningfully.
- Inventory drawdown of ₹44.62 Cr in FY26 vs build-up of ₹51.71 Cr in FY25 — execution cadence accelerating.
- Other Equity grew from ₹1,497.02 Cr to ₹1,724.77 Cr purely through retained earnings — compounding book value organically.
- EPS of ₹48.47, up 22.3% YoY with zero equity dilution — clean per-share value creation for shareholders.
🔴 Red Flags
- Trade receivables surged from ₹596.40 Cr to ₹727.77 Cr (+₹131.37 Cr, +22%) — DSO expanding; government/defence client payment cycles remain a drag.
- Receivables at 78.7% of annual revenue (₹727.77 / ₹924.77) — dangerously high concentration; any payment delay materially impacts liquidity.
- Margin compression of 200–260 bps at both EBITDA and PAT levels — cost inflation (employee, depreciation) not fully absorbed by revenue scale-up.
- Other current liabilities collapsed from ₹179.38 Cr to ₹45.73 Cr — likely advance receipts consumed; fewer customer advances on hand reduces revenue visibility buffer.
- Other income of ₹27.96 Cr includes ₹22.21 Cr investment gains — core operating profitability is flattered; strip this and PBT margin compresses further.
- Depreciation jumped 65% YoY (₹13.92 Cr → ₹22.95 Cr) — capex cycle intensifying; will remain a PAT headwind through FY27.
- Free cash flow thin: Operating CF ₹80.15 Cr minus capex (PP&E + intangibles) of ₹72.06 Cr = ~₹8 Cr FCF — high-quality earnings not yet translating to surplus cash.
📊 Balance Sheet Analysis
- Equity base of ₹1,735.97 Cr vs total liabilities of ₹193.25 Cr — debt-to-equity effectively zero; balance sheet is fortress-grade.
- Current ratio: ₹1,468.21 Cr / ₹140.44 Cr = 10.5x — exceptional liquidity, though inflated by large receivables and mutual fund investments (₹328.85 Cr).
- Intangible assets (₹71.22 Cr) + under development (₹60.86 Cr) = ₹132.08 Cr — material R&D asset base; amortisation will continue to pressure reported PAT.
- Deferred tax liability reduced from ₹22.45 Cr to ₹20.12 Cr — minor, but signals no aggressive tax deferral building up.
💰 Cash Flow Analysis
- OCF of ₹80.15 Cr vs PBT of ₹363.54 Cr — OCF-to-PBT conversion of just 22%; bloated receivables (₹136.18 Cr outflow) are the primary culprit.
- Investing outflow of ₹3.21 Cr is net of ₹199.65 Cr investment redemptions — gross capex (₹72.06 Cr) is well-funded; net number understates true investment intensity.
- Financing outflow of ₹57.73 Cr is entirely dividend (₹44.23 Cr) and lease payments — no debt servicing, clean capital return profile.
- Net cash position improved: closing cash ₹56.85 Cr + bank balances ₹36.98 Cr + liquid investments ₹328.85 Cr = ~₹422.68 Cr liquid reserves — strong financial buffer despite low FCF.
💡 Investment Outlook
Data Patterns is compounding revenue and earnings at a healthy clip with one of the cleanest balance sheets in Indian defence electronics — zero debt, 43%+ EBITDA margins, and growing R&D assets signal durable competitive advantage.
The FY26 margin compression is a cost-absorption phase driven by headcount and depreciation build, not a structural erosion; watch for operating leverage recovery in FY27 as the revenue base scales.
The critical monitorable is receivables — at 79% of revenue and growing, any slippage in government payment cycles could tighten liquidity despite the strong liquid reserves.
The collapse in customer advances is an early warning that near-term order execution must drive revenue rather than pre-received bookings.
Disclaimer: This post features ChartAlert-AI-generated financial content which may contain inaccuracies or errors. This commentary is strictly for informational purposes and does not constitute a recommendation to buy or sell any security. Investors are responsible for performing their own due diligence; always consult with a licensed financial advisor before making investment decisions.
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