Motilal Oswal's research report on Data Patterns India
Data Patterns (DATAPATT) witnessed a revenue decline (down 16% YoY) in 2QFY25, led by ~97% decline in development revenue on account of the deferment of an order. However, the company expects to record revenue growth in 2H, maintaining its FY25 guidance. Despite this, EBITDA margins expanded marginally by 10bp YoY, led by a favorable business mix. We maintain our FY25/FY26 EPS estimates in expectation of a strong pickup in 2H.
Outlook
We reiterate our Neutral rating with a TP of INR2,300 (premised on 45x FY26E EPS), owing to its higher working capital cycle and rich valuations.
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