Can Data Patterns become the Bharat Electronics of tomorrow?

India’s defence-electronics market has a clear leader and a fast-growing challenger. Bharat Electronics (BEL) is the government-backed lead contractor that delivers complete systems end-to-end. Data Patterns is a design-heavy specialist with high margins that is now bidding for larger, turnkey projects.

The question isn’t “Can Data Patterns become BEL?” It’s whether Data Patterns becomes a credible mini-BEL, growing faster without losing its margin edge?

Same battlefield, different roles

Both companies compete across the same lines of defence electronics. This includes radars, electronic warfare, avionics and communications for India’s armed forces and space missions. Data Patterns positions itself as an integrated design-to-delivery electronics supplier across those domains; it isn’t a mere component vendor.

But their positions on the value chain still differ. Think of a metro project: BEL is the EPC (Engineering, Procurement and Construction) lead contractor delivering the whole line from stations, tracks, power to handover. Data Patterns is the signalling and train-control integrator. It is the specialist that makes everything talk and run on time, now bidding to own entire signalling packages.

That’s why the comparison is fair thematically, but not direct on scale or breadth.  

BEL: The General Contractor with a Fortress Balance Sheet

BEL’s numbers explain its situation. In 1QFY26, BEL posted Rs 44.4 bn in revenue from operations. Management reiterated FY26 guidance of 15–17.5% revenue growth with ~28% EBITDA (Earnings before interest, tax, depreciation and amortization) margin. The order book stood at Rs 749 bn at the quarter end, with Rs 73.5 bn of order inflow in the quarter and a potential QRSAM (Quick Reaction Surface-to-Air Missile) award flagged for 4QFY26.

That’s the “general contractor” model at work. Meaning, a pipeline of large, multi-year programs, the manufacturing muscle to execute and a portfolio that spans naval, radar, EW, avionics and more.

Data Patterns: The High-Margin Specialist with the IP Edge

On an absolute scale, Data Patterns is small. But it’s built around in-house IP (Intellectual Property) and systems engineering, which shows up in its profits. In FY25, the company reported Rs 7.1 bn revenue from operations and a ~39% EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) margin, while remaining debt-free at year-end.

The company’s momentum into FY26 was lumpier, which is normal for project businesses. 1QFY26 revenue came in at Rs 993 mn, held back by a dispatch-clearance delay that management expects to book later. That adds visibility.

There’s also real progress on higher-value content. The company completed a seeker flight test for BrahMos, which is a critical import component, creating a pathway to production contracts if orders materialise.

The financial scoreboard – FY25 

At a cursory glance, two things jump out. 

First is the scale. BEL’s order book is roughly 90× Data Patterns’ book today. 

Second is the structure. Data Patterns’ margin profile is already elite. And so, if it can scale while keeping those margins intact, operating leverage can be powerful.

The Path to a ‘Mini-BEL’: From Pilots to Platforms

1. Convert tech wins into platforms.
2. A one-off development contract is nice. A platform win is transformative. The BrahMos seeker test creates an option to move from development into production and then into multi-year AMC (Annual Maintenance Contract)—exactly the mix that can smooth cash flows and compound margins.
3. Keep the order mix moving toward “repeat + annuity.”
4. The 1QFY26 inflows show a healthier blend—AMC for BrahMos, production orders, and development in EW, radar and avionics. More of that mix means less quarter-to-quarter whiplash.
5. Scale without breaking the margin machine.
6. Management’s FY26 guide—20–25% growth with 35–40% EBITDA—implies that the IP-heavy model can go far. If FY25’s ~39% EBITDA on Rs 7.5 bn total revenue holds as the base, the math compounds quickly. The caveat: growth usually demands more working capital and talent.

But, what could go wrong

Quarterly volatility is part of the job. 1QFY26 revenue dipped because a dispatch-clearance slipped; deliveries should catch up, but the market often punishes quarterly numbers even when engineering and execution are on track.

The BEL effect. When the lead contractor is signing Rs 270 bn of orders in a year (management guidance, excluding QRSAM (Quick Reaction Surface-to-Air Missile) at Rs 300 bn), the industry’s throughput and bargaining power skews to the giant. Now that doesn’t necessarily mean you, retreat. But it’s a reason to pick your lanes.

Pricing Perfection: The High-Valuation Tightrope

Data Patterns already trades at a premium, roughly 65–66× P/E (Price-to-Earnings ratio). Clearly, the market is paying up for flawless execution. To earn and hold that multiple, three things need to show up in reported numbers:

1. the order book should step up toward a higher percent of annual revenue and tilt further toward recurring AMC/service,
2. development wins must convert into steady production plus multi-year AMC, and

Now, BEL isn’t cheap either. It trades at about 51× P/E a. But its scale, diversified programs and order inflow tempo provide a safety net. 

For investors, that means Data Patterns offers higher operating leverage if it executes, but also higher de-rating risk if inflows or cash conversion wobble.

In conclusion

BEL builds the whole metro; Data Patterns runs the signalling—and is now bidding to run entire signalling lines. BEL’s strength is a huge profit pool, a massive order book and a conveyor belt of large programs. 

Data Patterns’ strength is the margin pool, the IP, design control, and a product roadmap that can turn pilots into platforms.

If Data Patterns turns BrahMos-type wins into production plus AMC, keeps 35–40% EBITDA with 20–25% growth, and secures a few turnkey niches, it can be a durable mini-BEL with superior returns on a smaller base. A rerating can follow if execution holds.

Disclaimer

Note: We have relied on data from www.Screener.in throughout this article. Only in cases where the data was not available, have we used an alternate, but widely used and accepted source of information. 

The purpose of this article is only to share interesting charts, data points and thought-provoking opinions. It is NOT a recommendation. If you wish to consider an investment, you are strongly advised to consult your advisor. This article is strictly for educative purposes only. 

Manvi Aggarwal has been tracking the stock markets for nearly two decades. She spent about eight years as a financial analyst at a value-style fund, managing money for international investors. That’s where she honed her expertise in deep-dive research, looking beyond the obvious to spot value where others didn’t. Now, she brings that same sharp eye to uncovering overlooked and misunderstood investment opportunities in Indian equities. As a columnist for LiveMint and Equitymaster, she breaks down complex financial trends into actionable insights for investors.

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