Data Patterns shares hit 52-week low, rebound 16% today; time to buy?

Multibagger stock: Shares of Data Patterns India (Ltd) rose 16% from their 52 week low reached in the same session today. The defence stock hit a 52-week low of Rs 1405.35, falling 1.41% in early trade. Later, the multibagger stock climbed 16% from its 52-week low to Rs 1631 on BSE. On an intraday basis, Data Patterns shares rose 14.42% against the previous close of Rs 1425.40. 

The multibagger stock has fallen 45.43% in six months, 31.47% in a month and 22% in two weeks. Data Patterns stock is trading lower than its 5 day, 10 day, 20 day, 30 day, 50 day, 100 day, 150 day and 200 day moving averages, which indicates its bearish movement. 

In the current session, market cap of Data Patterns rose to Rs 8,732 crore. 

The stock has a one-year beta of 1.3, indicating high volatility during the period.

In terms of technicals, the relative strength index (RSI) of Data Patterns stands at 18.8, signaling the stock is strongly oversold on charts. 

Brokerage Nirmal Bang has buy call on the stock with a target price of Rs 2,997. 

The brokerage is bullish on the stock due to the firm's strong in-house R&D capabilities and deep domain knowledge in radars, electronic warfare etc. The order book is projected to rise at a CAGR of 19% between FY25E and FY27E. 

Efficient execution will drive operating leverage, said the brokerage. The company remains confident in maintaining operating margins within the 35-40% range over the next 2-3 years. 

Brokerage JM Financial has a buy call on the stock with a target price of Rs 2860. 

"We remain positive on stock in long run due to inhouse design capabilities, strong order backlog & pipeline, sustained EBITDA margins and focus on product development to increase TAM. However, factoring in continued delay in execution, order inflows and slower pickup in EBITDA margin expansion due to higher contribution of development contracts, we have lowered our EPS estimates by 6.1%/7.9%/11.5% for FY25/26/27E. However, due to steep correction in stock price in last four months we maintain BUY with target price of Rs 2,860 valuing it at 50xSep’26E (57x Sep’26 earlier), factoring in continued lower inflows and delayed execution," said JM Financial. 

Key risk to the brokerage's assumption are slowdown in government spending on defence, weak order inflows and delay in new product pickup. 

Ashika Institutional Research has a price target of Rs 2,805. 

"Data Patterns is actively participating in high-value tenders under the defence ministry's Make-I and Make-II categories with a commitment for indigenization in Make-I projects. These initiatives involve end-to-end domestic processes from design to manufacturing, which not only strengthen indigenous capabilities, but also drive indigenous innovation. While these projects demand significant infrastructure, expertise and investment, DPIL is well-equipped to meet these requirements. At CMP, while the stock trades at ~37x of FY27E EPS of Rs 62.4, we expect its EPS to clock 24.7% CAGR over FY27E. Thus, we initiate coverage on Data Patterns with BUY and a target Price of Rs 2,805, valuing the stock at 45x of FY27E EPS," said Ashika. 
PhillipCapital said Data Patterns stands out as a vertically integrated player in the defence and aerospace electronics space, leveraging its in-house design and development expertise. The brokerage has initiated coverage on the stock with a 'Buy' rating and a target price of Rs 3,400. 

Data Patterns is a top pick of domestic brokerage Nuvama 

Data Patterns (India) Limited is an India-based vertically integrated defence and aerospace electronics solutions provider catering to the indigenously developed defense products industry. Its portfolio includes COTS Boards, ATE and Test systems, Space Systems, and Radio Frequency and Microwave. It designs COTS module products that are used in rugged applications and automatic test equipment platforms.