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• blogpostTitle: Data Patterns Q4 FY26: Margins spike, order visibility strengthens
• blogpostSlug: data-patterns-q4fy26
• blogpostCoverImageUrl: null
• blogpostCoverImageDescription: Ultra-realistic corporate finance scene inside a modern Indian defence electronics R&D and manufacturing office. In the foreground, a large widescreen dashboard on a desk displays clean unlabeled charts: a rising revenue line from FY22 to FY26, a bar chart of EBITDA increasing, a donut chart showing revenue mix with a largest radar slice and a large ATE slice, and a gauge showing EBITDA margin near 40 percent. In the background, engineers in a lab-like workspace and a blurred manufacturing test area suggest high-reliability electronics work. Neutral lighting, professional tone, no logos or text.
• blogpostShortTitle: Data Patterns FY26 growth and order book */

Data Patterns Q4 FY26: Margins spike, order visibility strengthens

Data Patterns (India) Limited ended FY26 with strong full-year growth, even though the fourth quarter showed the usual defence-sector lumpiness in revenue recognition. For FY26, revenue from operations rose to Rs 924.8 crore, up 30.6 percent year on year. EBITDA grew faster, up 34.9 percent to Rs 371.0 crore, lifting EBITDA margin to 40.1 percent for the year. PAT came in at Rs 271.4 crore, up 22.3 percent.

Q4FY26 was notable for profitability. Revenue from operations was Rs 344.9 crore, down 13.0 percent YoY but up 99.2 percent sequentially versus Q3FY26. Gross margin expanded sharply to 73.4 percent and EBITDA margin to 55.9 percent. Management attributed margin variability to mix. Some contracts are taken deliberately at lower margin to build system-level capability and program management know-how, while quarters dominated by in-house IP led full systems can show significantly higher margin profiles.

What drove the year: mix, execution, and a broad portfolio

The company’s FY26 revenue mix in the investor presentation shows radars as the largest contributor at 40.1 percent, followed by ATE at 27.7 percent and electronic warfare at 12.6 percent. AMC contributed 4.1 percent, while communication systems were 2.6 percent. Smaller shares came from naval systems, ECS, avionics and service and others.

Quarterly mix can swing meaningfully. In Q4FY26, the revenue breakup by products shows EW at 48.5 percent and communication at 20.8 percent, with radar at 6.7 percent. This highlights how program schedules and delivery milestones can alter quarterly composition, and therefore margins.

A second lens on the model comes from the production, development and service split. For FY26, production contributed 58 percent, development 37 percent, and services 5 percent. Within FY26 quarters, the shares moved widely, reinforcing the point that revenue recognition is tied to customer requirements and contract structures.

Order book and visibility: negotiated orders and repeat potential

The reported closing order book at March 31, 2026 was Rs 926.5 crore. Management repeatedly referred to an order book of about Rs 2,062 crore including negotiated orders, which implies a meaningful portion of business in advanced negotiation or expected conversion.

During the call, management also highlighted additional single vendor repeat contracts based on already supplied products, which it said could aggregate about Rs 1,900 crore during the financial year. While management indicated a view that some negotiated conversions could happen in one to two months, it also stressed that customer processes are largely government-led and timelines cannot be predicted with precision.

Order inflows themselves were strong in FY26. The investor presentation shows total order inflow of Rs 1,121.4 crore in FY26 versus Rs 355.1 crore in FY25, and Q4FY26 inflow of Rs 528.0 crore versus Rs 31.4 crore in Q4FY25. The company described order inflows as diversified across radars, avionics, EW, services and strategic electronics.

The order book mix also shifted. The FY26 order book build-up slide indicates a services share of 41 percent at FY26 year-end, and 38 percent as of Q4FY26, with the rest split across production and development. Management clarified that service orders are largely AMC type contracts over multiple years, and billing depends on service delivery schedules, contract terms and customer payment cycles.

Strategy and investments: full systems, exports, and capacity

The presentation and management commentary are consistent on a few strategic priorities.

First is moving up the value chain. The company reiterated a focus on building complete systems using reusable in-house building blocks, creating in-house IP and reducing reliance on bought-out integration. This is important because management directly linked Q4’s strong margin profile to revenue dominated by its own full systems with limited bought-out content.

Second is product development. The investor presentation states that more than Rs 131 crore has been invested in new product development, with multiple programs at advanced stages. In the call, management discussed progress on EW suites including self-protection jammer pods for fighter aircraft, with the next steps aimed at flight testing, as well as anti-drone detection and jamming related solutions using radar and ESM products.

Third is exports. Data Patterns highlighted successful export and site acceptance testing of transportable precision approach radars to a European country. The export order book as on date was cited at Rs 53 crore. Management stated that global OEM visits and inquiries are increasing, particularly from Europe, and it plans to build a stronger export marketing and business development organization.

Finally, capacity and capex. The company stated it has invested about Rs 185 crore in capex over the last five years and plans an additional Rs 150 crore over the next two years. The infrastructure slides describe large system integration, radar integration, EW vehicle integration and satellite integration capability, consistent with the stated goal of scaling into larger systems and higher complexity programs.

Working capital remains a key monitor

Despite strong accounting profitability, cash generation has been constrained by working capital. In FY26, the company reported a cash conversion cycle of 365 days, improved from 428 days in FY25. Debtor days were 287 in FY26. Trade receivables increased to Rs 727.8 crore at March 2026 in the historical balance sheet table.

On the call, the CFO said the company is focused on improving the working cycle and expects the cash conversion cycle to settle around 320 to 340 days over time, although it is too early in the year to provide a precise conversion outlook.

Takeaways

Data Patterns delivered a strong FY26 on both growth and margins, supported by a broad defence electronics portfolio and sustained customer demand. Q4FY26 stood out for very high margins, which management linked to product mix and in-house IP driven system sales. The balance sheet remains net debt free, with substantial cash and investments.

The key variables to track from here are the timing of negotiated order conversions, the pace of repeat contracts, and working capital outcomes in a government-led procurement environment. Against that backdrop, management’s stated objective of 20 to 25 percent revenue growth over the next two to three years, while keeping EBITDA margins in the 35 to 40 percent range, sets a clear operating frame for FY27 and beyond.