Data Patterns extends rally post Florintree Capital exit; up 72% in 15 days

Shares of Data Pattern (India) continued at their upward march, hitting a new high of Rs 3,078 on the BSE in Monday's intraday trade. In the past 15 trading days, the stock of the aerospace & defense company has zoomed 72 per cent as the Florintree Capital Partners divested over 10 per cent stake in the company via open market.

On February 16, Florintree Capital Partners, led by Mathew Cyriac, divested its entire 10.71 per cent stake (6 million equity shares) in Data Patterns, amounting to nearly Rs 1,100 crore.

The Singapore Sovereign Wealth Fund GIC acquired over 6 per cent stake valued at Rs 650 crore in the company via open market.

GIC Private Limited on account of Government of Singapore (GOS), and the Monetary Authority of Singapore (MAS) also bought a total 3.54 million equity shares, representing 6.32 per cent stake, in Data Patterns via the open market, data shows.

Among other buyers, HDFC Mutual Fund, Kotak Mahindra Mutual Fund, Mirae Asset Mutual Fund, Monetary Authority of Singapore, and Mathew Cyriac bought the shares via bulk deals, data shows.

On the policy front, the government last month relaxed foreign direct investment (FDI) norms for the space sector by allowing 100 per cent FDI in manufacturing of components, systems or sub-systems for satellites, ground segments, and user segments.

It also permitted 74 per cent FDI in satellite manufacturing and operation, satellite data products, and 49 per cent in development of launch vehicles and spaceports.

Data Patterns works closely with the defence PSUs such as Hindustan Aeronautics and Bharat Electronics as well as government organisations involved in defence and space research like Defence Research and Development Organisation (DRDO), and Indian Space Research Organisation (Isro).

The company's core competencies include design and development across electronic hardware, software, firmware, mechanical, product prototype besides its testing, validation, and verification. Its involvement has been across radars, electronic warfare suites, communications, avionics, small satellites, automated test equipment, COTS and programmes catering to Tejas Light Combat Aircraft, light utility helicopter, BrahMos, and other communication & electronic intelligence systems.

During its Q3FY24 earnings call, Data Patterns said that it has strategically aligned itself to leverage favorable industry conditions, particularly in the anticipated tailwinds from government policies, driving a 15 per cent CAGR in India's defense production. Projections further suggest that the defense outlay in India is expected to grow at a CAGR of 12 per cent, reaching $147 billion over FY25-29 period.

"This anticipated growth is backed by initiatives such as Atmanirbhar Bharat, Positive Intergenerationalist, and the Defense Modernization Plan, a robust order pipeline for the Indian defense industry. These strategic measures are poised to contribute significantly to the company's success in the evolving landscape of the defense sector," the management said.

The company is capitalising on promising opportunities in radar, electronic warfare, and satellite markets. Data expansions in the export markets were actively pursuing various prospects in collaboration with domestic competitors. Active participation in contracts worth Rs 2,000 crore to Rs 3,000 crore over the next three to four years, the management added.