The agency has also affirmed the company’s short-term rating at ‘[ICRA] A1’.

ICRA stated that the rating reaffirmation for Data Patterns India (DPIL) factors in the expected improvement in the order book position, steady growth in revenues with healthy operating margins, low leverage levels while maintaining strong liquidity position in FY2026.

The ratings take into account the limited dependence on debt and sustenance of strong liquidity position, despite capex plans of around Rs. 75-100 crore in FY2025 and Rs. 100-125 crore in FY2026for infrastructure and product development, which will be fully funded by internal accruals. Backed by low debt levels and absence of debt-funded capex plans, the leverage and coverage metrics are expected to remain comfortable.

The ratings favourably factor in the company’s established track record for more than three decades in the design, development and manufacturing of electronic equipment for defence and aerospace sectors.

This has supported DPIL in establishing strong relationships with reputed defence organisations in the domestic market, leading to repeat orders. Its growth prospects remain healthy, driven by the Indian Government’s focus on indigenisation in the defence sector as a part of the Make in India programme.

The company’s working capital intensity (NWC/OI) stood at127% as of September 2024 (105% as of September 2023) from 76% as of March 2024as the operations continue to be working capital intensive owing to longer receivable cycle and high inventory levels. DPIL’s strong liquidity position acts as a mitigant to an extent.

The ratings factor in the long gestation nature of projects executed by the company, involving design and development of products. There is a relatively high likelihood of projects being deferred due to procedural delays (leading to order deferment), as inherent in the defence industry.

Data Patterns (India) is a defence and aerospace electronics solutions provider catering to the indigenously developed defence products industry with in-house design and development capabilities.

The company’s standalone net profit fell 12.4% to Rs 44.66 crore in Q3 FY25 as against Rs 50.97 crore posted in Q3 FY24. Revenue from operations declined 16.1% YoY to Rs 117.04 crore in the quarter ended 31 December 2024.

The scrip had gained 1.39% to end at Rs 1713 on the BSE on Friday.