Data Patterns (India) Ltd (NSE: DATAPATTNS) Q1 2026 Earnings Call dated Aug. 08, 2025
Corporate Participants:
Unidentified Speaker
Srinivasagopalan Rangarajan — Chairman and Managing Director
Rekha Murthy Rangarajan — Whole-time Director
Venkata Subramanian — Chief Financial Officer
Analysts:
Unidentified Participant
Monali Jain — Analyst
Dipen Vakil — Analyst
Hardik Rawat — Analyst
Amit Dixit — Analyst
Jyoti Gupta — Analyst
Krishna Doshi — Analyst
CA Garvit Goyal — Analyst
Rupesh Tatiya — Analyst
Rahul Jain — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to Data Patterns India Limited Q1 FY26 earnings conference call hosted by Go India Advisors. As a reminder all participants line will be in. Listen only more and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call please signal an operator by pressing Star zero on your touchstone phone. Please note that this conference is being recorded. I now hand over the conference to Ms. Munari Jain from Goindia Advisors. Thank you. And over to you ma’. Am.
Monali Jain — Analyst
Thanks Pareel. Good morning everyone and welcome to Data Patterns India Limited earnings call to discuss the Q1 FY26 earnings. We have the senior management of the company on call. Mr. S. Rangarajan, Chairman and Managing Director and Mr. Venkat Subramanian, Chief Financial Officer. We must remind you that the discussion on today’s call may include certain forward looking statements and must be therefore viewed in conjunction with the risk that company faces. May I now request Mr. Rangarajan to take us through the company’s business outlook and financial highlights. Subsequent to which we can open the floor for Q and A.
Thank you. And over to you sir.
Srinivasagopalan Rangarajan — Chairman and Managing Director
Thank you Munari. Good morning ladies and gentlemen. I am pleased to welcome you all to our FY Q1 FY26 earnings call. I hope you had the opportunity to review our earnings presentation. It is available in the stock exchanges and on our website. Before Venkat takes you through the financial performance let me start by sharing some key updates and strategic commentary from our end. We have delivered a reasonable start to the year despite some delays in customer approvals that impacted the pace of revenue recognition. Nevertheless, the quarter has met our expectations. Our order book now stands at a strong 1079 crores with more than 320 crores of orders received since the start of the financial year including some orders from BrahMos and MOD.
Our export order book remains healthy at over 100 crores and we’re seeing increasing traction from international markets post the operation. Sindur, we are witnessing heightened urgency from the government to procure and deploy indigenous defense equipment, some of which aligns well with our capabilities. However, to participate meaningfully in such opportunities, it is critical that companies have fully developed products and complete internal trials before submission. This underscores our strategy we must build first to be eligible to win. At data parlance, we have consistently invested ahead of the curve to expand our addressable market, especially in areas where there are no existing domestic products.
Our goal is to identify these opportunities, leverage our core competencies and develop differentiated capabilities that give us a sustainable edge. We remain deeply committed to R and D and product development. We already deployed over 120 crores in the new product development activities. The focus on building indigenous capabilities across radar systems, electronic warfare, communication systems and airborne systems. Our continued efforts in the product development have resulted in products of international quality. We are optimistic that these products will soon be tested and potentially lead to bigger contracts. These initiatives align with our long term strategy to scale our total addressable market and we’re doing that with discipline and foresight.
At the same time, we remain unwavering in our focus on profitability and value creation to our stakeholders. Conclude the environment is shaping up positively both domestically and globally. Our pipeline is strong and the confidence of achieving full year growth. Guidance of 2025% revenue growth while maintaining healthy EBITDA margins in 35% to 40% range. With that, I’ll now hand it over to Venkat to walk you through the financials in more detail.
Venkata Subramanian — Chief Financial Officer
Thank you sir and good morning everyone. Let me take you through the financial highlights for the first quarter of FY26 Q1. FY26 revenues took at 99 crore down by about 4.6% year on year due to customer approval related delays that deferred dispatches and revenue recognition.
Cost of goods sold declined by 30% year on year due to favorable product metrics. EBITDA came in at around 32 crores with margin at 32.3% showcasing operational efficiency even on a lower top line. Net Profit stood at 25.5 crore with pack margin at 25.7 percentage. Highlighting our continued focus on profitability, we expect pickup in the execution and revenue growth from Q2 onwards backed by a strong order book and visibility. As mentioned earlier, we remain firmly on track to meet Our stated guidance of 20 to 25 percentage revenue growth. With that I now open the floor for questions.
Thank you.
Questions and Answers:
operator
Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press Star and one on their Touchstone telephone. If you wish to remove Yourself from the question queue. You may press star and two participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Deepen Vakil from Philip Capital. Please go ahead.
Dipen Vakil
Hi, good morning sir and thank you for this opportunity. So my first question is on the lines of so this quarter out of 183 crores of order wins majorly. We have won orders on the EMC side of services side of contract. So can you tell us more about these contract in terms of their execution period and the cyclicity or the when we can how is the ordering pattern for the tour whether they are awarded yearly. So can you give us some throw some more light on these orders.
Srinivasagopalan Rangarajan
Main AMC contract we received is from Brahmos. This is for a 5 year AMC but it is predated AMC from starting from last January I think January or March. February. So this is normally we do the AMC three years to five years for Brahmos and this is a five year AMC contract which is billable yearly.
Dipen Vakil
Okay. So we can expect similar contracts to come in every. Every five years or every year.
Srinivasagopalan Rangarajan
What happens is this five year contract is for orders executed and post warranty these contracts have come for what we executed earlier. We also have orders for additional Brahmos deliverables this year we’re also expecting additional Brahmos orders because more orders are now coming for Brahmos from the Air Force and Navy. So those back to back orders we expect also from our data patterns also expecting seeker orders. So it’s a question of older orders. We get amc. As soon as the new orders come and their warranty period is over, we again get an AMC. It’s a confidence AMC we get from Brahmos.
It’s been going on for 10 years plus now and there are some few products where warranty is still continuing. So once that warranty is completed we will get AMC contracts on those systems also.
Dipen Vakil
Got it sir. So and talking about the order pipeline that you also mentioned that there’s a strong order pipeline right now and also recently government had granted AON for fire control system for Brahmos. So possible for you to give us that out of 22,000 to 3000 crore of order inflows that you’re expecting in 18 to 24 months, how much of can we achieve more than 1200 crores in this year which will help us to sustain like decent execution visibility going ahead. So can you give us some more clarity on that.
Srinivasagopalan Rangarajan
There’s a number of contracts which we’re executing which we expect there is, you know, Rolloville, this Ashwini contract, this is still not. We have got the order back to back, discussions are on. We expect the contact maybe in the next three to five, six months time. That also should come this year. There are a number of contracts which for airborne radars which we have done development is also expected to rectify in the next five, six months time. Similarly we have a list of this kind of what we call order pipeline where we are a single vendor.
So the contracts are supposed to happen we believe the next six, seven, eight months, probably before end of the year or next year we should get some thousand plus crores orders. We’re also on the other thing, we’ve also done development, product development using the funds taken from the market. These are all mature, getting to some level of maturity. We expect that there will be some development contracts for these orders for flight testing. So we have a list of such contracts. I don’t know whether I can tell you exactly which line item value is going to be but the order pipeline of this thousand, two thousand crores you’re talking about 2 to 3 million which you’re talking about is all based on those kind of contracts.
Dipen Vakil
Got it. So that’s really very encouraging. Thank you so much and I’ll get back to the queue.
Srinivasagopalan Rangarajan
Thank you.
Dipen Vakil
Thank you.
operator
Thank you. The next question is from the line of Hardik Rawat from IIFL Capital. Please go ahead.
Hardik Rawat
Thanks for the opportunity and good morning team. My first question would be with regards to the delays that were mentioned. So sir, could you please tell us exactly which orders have faced these delays in customer testing and what will be the quantum of slippage in revenue recognition that you’ve seen in the course?
Srinivasagopalan Rangarajan
I don’t want to name customer and value value. I can tell you around maybe 27 crores. But they just started testing now. Last 10 days work has started, customer acceptance has started. So if this goes on properly we should be able to bill it coming quarter. But this is what is planned at least every quarter. We’re trying to build it this quarter because of inspections getting delayed substantially. We are not able to do this for last one year. But inflation has started now so hopefully that will get built probably this quarter.
Hardik Rawat
Got it sir. So another question was with regards to, you know, your commentary on the order inflows. Now your commentary is quite encouraging and it would be a fair assumption that you know roughly 15 billion plus rupees worth of order for the full fiscal Is something that we should be looking at 15 to 20 billion on an overall basis.
Srinivasagopalan Rangarajan
There are contracts likely to happen but unfortunately we are not able to cover the exact time of the contract because there are some delays happening which is beyond our control. Yes, can happen maybe slightly less or slightly more. But it depends on how government really moves these kind of products. Other than what is already done. There are a lot of other products which are going to MOD fet. This is what’s called part of the tender is going through a field evaluation trial on ew. A few products involved in ew. We successfully crossed one EW product.
We expect the tender bid to be open. Hopefully we will try and get the order and some more are in pipeline next month. This coming month and next month. These are all products which is 100% designed in house. These are the other companies which we import and integrate has been designed in house. We expect some traction in the EW programs on ELINT and Comet and ground systems. So there are requirements like this. Similarly there are requirements of single tinting for radar warning receivers which is going to be airborne for Sukhoi garbage and other platforms. Those are also expected.
So timing may vary now and then but other than the pipeline which you talked about, the new requirements of Mood have come up because of this operation SINDUR and we also participate in those kind of contracts now. We probably started over two years back developing these products truck mounted systems. So the specifications are meeting and we are continuously improving specifications. We see that we meet international specs and meet the customer requirements. So we expect some more contracts in those areas also. Plus you know, our seeker for promos is successfully tested. We expect some contracts to happen in the next coming months and after that, once that is delivered, we’re talking about some 100 systems etc.
So most of the Seekers now, all the Seekers now are imported seekers for Brahmos. The idea is to make this indigenous. If this happens now, I expect a substantial increase in order as we go along in the coming year.
Hardik Rawat
Sir, speaking of what would be, you know, sort of a value of order that we could see, say for example hundred of these systems get. Assuming that we received that order, what could be the potential order size?
Srinivasagopalan Rangarajan
It’s a bit premature. Let me get closer to it. First we’ll get the development order executed and then towards nearing the date we will be able to tell you the price of water because I don’t want to predict the value business before the inquiry comes from Brahmos. That will not be correct. So I can only tell you it will be substantial and these are all the things which will give me yearly. I think what we’re trying to do is you can’t have a one year contract order book for that. That does not augur well for defense agencies, especially in capital goods.
You need to have at least three, four years of order book and then only we can invest in scale. We are doing the ULTA here in India because we need to have products and to address the market. We are actually putting our money and developing hundreds of crores. We are putting money and developing, getting the products online, then going through evaluation trials and things like that. It’s a very hard way of growing. It’s the only way accessible to us. Otherwise it has to be only collaboration. We have taken the hard route and going through what we think we have competent and where there are no such products available in India.
So we’re trying to be unique in that and building products and putting our money and effort on this. So it’s a different strategy with what we’re doing and I think it will pan out in the next five, six months. You’ll see that some traction is happening in all these areas.
Hardik Rawat
Appreciate it sir. So one last question before I get back to the queue. You know our employee cost has seen a 27% yoy estimation. Just wanted to understand what has driven this. Is this headcount driven or simply wage inflation?
Srinivasagopalan Rangarajan
No, it is headcount driven. There is wage division plus headcount driven. Suppose we want from the 700 crores to be a python crore company in the next, let’s say four years, five years. We need to do not just the products, we are building upfront products, going to fly test, getting qualified so the orders can come in the next two to three years time. Once you do that, we also need to have people to see that we produce the kind of. You cannot scale like this. These are all complex products and though we do automatic test equipment to produce them in numbers as we go along, the types which you do is so large.
It is not the same type of product which is done in 100,000 pieces. It becomes very simple. The types are so large and so many and all are complex. It is necessary to have quality people, trained people to do this. So we started recruiting people, training them for their requirement as we go along. The second thing we are doing also is creating infrastructure, production infrastructure, anticipating these contracts to happen. So we will be spending now so that we will be able to deliver in three years from now or two years from now. The contract happens in delivery.
You can’t deliver, suddenly takes 720, 500, 2500. It’s not practical. You can’t do it. You need to put in the infrastructure, see the delivery model happens. So these are all consciously done and we are going ahead and investing in people and training and that is how the cost is going up.
Hardik Rawat
Got it, sir. Thank you so much. I have more questions. I’ll get back into that. Thank you sir.
operator
Thank you. The next question is from the line of Amit Dixit from Goldman Sachs. Please go ahead.
Amit Dixit
Yeah, hi, good morning everyone. Thanks for the opportunity. Couple of questions, sir. The first one is on the if I look at the order inflow texture. So FY24 25 orders have largely been order inflow had largely beyond production price. But Q1 FY26 has been queued on services side. So just wanted to understand that whether this is the kind of pattern that we will see going ahead also that services would be a major portion or it is just that certain orders have been delayed and we expect the normal order profile to be back to 70, 75% of production.
And whatever services we get, it will be of course plus.
Srinivasagopalan Rangarajan
See it cannot be a service oriented business what we have because you don’t have too many contracts actually delivered to customer. Order delivered today, mostly in the last 10, 15, 20 years has been to DRDO and that doesn’t, you know, mature into a services contract or AMC contract later only when it goes to the actual users, this contract starts happening. So this has just started our life has just started with the users. Direct deliveries to MoD, Army, AAV, Air Force is happening now that will then mature into services contracts. So what you see in brahmos is the long term.
In 2006 we’ve been delivering brahmos launches. So the services contracts happen with more and more brahmos deliveries, more service contract happening from that. This is one of the few contracts which is happening like this. Many more should happen only once we populate more hardware orders with the users. This will happen in the next few years. So our main order book will be on actual delivery contracts as well as development contracts. But this year, I think from this year onwards the development contracts will become lesser and we think the delivery production contracts will become more taken a lot of development contracts earlier.
These are all hopefully in the next year or so mature to production contracts as we go along. And now that we are doing our own in house development or MOD requirements, we expect direct delivery contracts to happen or production contracts to happen with the mod.
Amit Dixit
Got it? Got it. The Second one is on the recent AON that was accorded for 67,000 crores. Now if we look at it, there are several items that actually fall within your purview. So any broad idea of TAM you would like to provide from that, you know, 67,000 crores. And also on execution side, we saw that Q1FY26 was skewed towards BEM. So is it the kind of, you. Know. Revenue profile that we will see doing the year? It is just in this particular quarter.
Srinivasagopalan Rangarajan
I can’t comment on the aoan because what is real is with all of those contracts, when you bulk it together, I won’t be able to comment on it. We only look at contracts which is accessible to us. So not just whatever the AON course is published, we don’t really look at it very seriously. So I can’t comment on that. On the second area which you’re talking about, it all depends on the kind of contract. Whether it be EL or HIL or ECIL or mod and depending on the timeliness of when they want the review to happen.
So that depends on that. Not necessarily it will only BAO oriented or any other organization oriented. It depends on the mix of contacts which we get. Ours is not a quarterly revenue business. That is why we are saying that towards the end of the year a lot of contracts will get delivered. Towards the end of the year maintaining our whatever we are positioning it taken say 20 to 80% growth. Actually what I expect is the top line growth is farther. My own worry is on the bottom line. We want to maintain the 20% bottom line.
Growth is what we plan to do. That is where our focus is and also increase the scale of the business.
Amit Dixit
Okay, understood sir. Thank you and all the best.
operator
Thank you. The next question is from the line of Jyoti Gupta from Nirmalbang. Please go ahead.
Jyoti Gupta
Morning sir. My question was on a similar line in terms of Bell. Two things that I wanted to understand was one, is there while you have different platforms where you are actually delivering, is there a cause where the margins I had anticipated slightly higher? Is that are we getting better margins from Bell compared to other platforms or is it like this quarter has been a little bit of a washout? Second, is you will be delivering the radars of the EW for hile and that is it looks like 5. But if the numbers for LCM1s increase for FY26, which is likely to happen given the engines will be delivered on time higher than what we expected, like we were expecting five LCAs.
But I think we should look at something like a seven to eight LCs this year. Will that not also help you improve your revenue as well as your profitability? Just your thoughts on that.
Srinivasagopalan Rangarajan
Okay, on the first question which you had, you said our margins have come down. Actually our margins have gone up. Gross margins have gone up to 80%. I thought we have done very well on the gross margin.
Jyoti Gupta
Yes, you have.
Srinivasagopalan Rangarajan
You’re probably talking ebitda. EBITDA is a different story because the top line comes down, expenses remain the same. So EBITDA comes down but our gross margin has increased. So the profitability has actually increased, not come down. And this as and when the revenue goes up, EBITDA also will go up because there is a fixed cost to the company which will go up. So I don’t think we are worried about our profitability at the present moment. Whatever we are delivering go over a basic doesn’t matter which organization is their IP driven products for profitability has only gone up.
The point is the revenue has come down because of non delivery of certain items because of customer acceptance delays. So that is what was explained earlier also. So that is actually the reason why we could not deliver what we wanted to deliver. But that is getting compensated in the next quarter. And some of the orders which we have taken up have taken a long lead time for manufacturing, design, development and manufacturing. So it doesn’t fall in the quarter to quarter category. This will happen during the course of this year. Larger orders. One order was already executed last year.
One of the large orders, 180 crores. We expect to execute this quarter or next quarter. So it has been one and a half years kind of development time frames. Those take a lot of time to build. It’s a very very complex system that is taking time. So that is the first question. I think we misread our numbers on the second Or LCM Arpone. We don’t actually do much in LCM Arpone or lca. We are doing the cockpit displays and that is one thing which you have in order. They want more for the additional 97. The inquiry has come.
We have not quoted because what we already developed the deliveries have not happened. So after JL picks up the delivery and pays us then we will make quotes for other things. So but we do have orders for LCMRK2. We do the glass cockpit which is called the large area display lad order. Very modern system, thin up system in the world like an F35 that we will be delivering in the next three, four months time. We do the mission system score NCMOP2 we have the order to do that. We expect that we should populate LCM II with a lot more of our products including the EW LCM1A also we had the EW which is flying very well but unfortunately government decided to import it from Delta.
The radar and UTTAM radar is not being considered recently unless there’s a change in things. So accordingly, because it comes as a package, we didn’t get the RWF though. It’s flying very well. But we will be considered for the Mark 2 and we are also considered for supply therapy for that. So there are a number of such programs which we are working on. But LCMrConne we are not very sure really what is the level of contribution unless they take our new radars and port it to LCMRPone. This is all on a discussion stage. No, I can’t comment on it at the present moment but we are very very bullish on the future.
There may be one or two programs we are not in. But on an overall level if you take. Since you have done a lot of product development we are very bullish about scaling the company looking at contracts beyond 5,000, 10,000 crores in the next few years time. That is the way we are trying to pitch our business.
Jyoti Gupta
Okay Sir, I would like to understand one more thing. On Jamma Port that you had worked on where all is it being? I mean which all platforms are there being used and what’s the kind of order that you received on that?
Srinivasagopalan Rangarajan
See we can’t receive an order. The government has no provision to place an order on private sector at the present moment unless it goes to a RFP and a proposal of RFIRFP and an open tender. However important or needed the whole contract is, they cannot do this. But it is proceeding very well. We have developed the part. It is going through air trials now. Air trials, aerodynamic trials and the liquid coolant trials are all going on. It will be finished in the next one month. Our own methodology of jamming technologies techniques is being tested. The hardware has been fully realized that is being tested hopefully next one one and a half months.
We should. We also made an offer to Air Force fit it into SU30. That is they have taken it very positively because of the. This is a self protection jammer which has to fitted to all the aircrafts. All aircraft. It goes on the wing tips of both the wingtips and it is a 360 degree jamming coverage. So since we have done this and they have seen it, they have taken a very positive View about it internally they are discussing how to give us a supply 30 to do no cost, no commitment trials. We believe in the next one week we should get clearance to accommodate a supply 30 for us basically to see that we do flight trials.
And once the flight trials are over then the inquiries will start for flight tested equipment. We believe that there is no other company in India because BRDU is there. They are already having a part and that is also going to go the flight. But so we’ll have an alternative. And we believe we have done very good, very modern, low weight, better aerodynamic part with more jamming efficacy, more power. So we believe we stand a very good chance in this. We have to go through the regular supply testing. It will take us year, year and a half to do this.
Post that the requirements are large. In January this year government has mod has cleared that for 7,400 ports for the Java pod for the EW suite, we have the RWR, we have the all the antenna, everything on the Java Pod. Plus the Java Pod has been designed in house. So we become automatically a player to be considered as long as we do the flight testing. And Air Force has promised us that they will give us a Super32 flight test. So government is very positive on industry participation, industry driven RD and after verifying validation with five systems in ground they are willing to even spend on flight testing on their own which is a welcome difference in the last 10 years.
So we believe we are very well positioned there. But for all this to happen because this contract value is above 10,000 crores requirements are there. We believe that we are well positioned in it. And all this will take time for it to. This is all the time I’m talking about. This is the upper money you’re taking to develop. But we have done our end of the job. We believe that we will continue to do well. So probably another year from now I’ll be able to answer your question more clearly.
Jyoti Gupta
Okay. Thank you sir.
operator
Thank you. The next question is from the line of Krishna Doshi from Ashika Stock Services. Please go ahead.
Krishna Doshi
Good morning sir and thanks for the opportunity. While most of my questions have already been answered, I have a question that you know right? Like right now we just mentioned that the development contracts are going to go down while we are going to see an increase in the production contracts. So just trying to understand sir, how is it going to impact our margin?
Srinivasagopalan Rangarajan
It doesn’t matter what contract we take of development or production. Because our company normally funds the development assets. So the price is given for the production Value only the prices given to customers even during development contract. So actually we don’t charge a non recurring development fee in most of the contracts we take up. I don’t think there is any difference between production and development in terms of gross margins. And the second is during production contract there is also government compensates us for the, you know, U.S. dollar exchange rate and duplication. All this is also taken care by then when a production contract happens.
But typically we don’t think we have a problem between margins and type of contracts.
Krishna Doshi
Okay sir. And is it possible to quantify like what sort of orders are we expecting when it comes to the emergency procurement? Like what, what will be the quantum of the orders that we are expecting?
Srinivasagopalan Rangarajan
Very difficult to predict ma’. Am. Because emergency procurement has a bunch of requirements out of which some of them we can address. But these have to be demonstrated. Field evaluation trials have to happen and then you pass the field evaluation trial then the lower Scot gets the contract. These are all competitive bids. Most of the emergency became on contracts goes towards either PSUs or direct imports to an Indian agent or made in India some kind of a company. We have our own designs where it belongs to us. In EW we have done a lot of work. Similarly some of the systems in avionics their procurement happening is happening now and we are participating in these kind of replacing imported systems with Indian capabilities.
But what we will turn out in terms of contract book I cannot tell you. And we are confident that EW some of the things we will be able to convert because we have done all the development in house. So we should be cost effective is what we are thinking. But only when the commercial bids are open we will know. So I can’t really detail out extent of value of contracts. This has to come quarter to quarter as and when we win the contract.
Krishna Doshi
Okay, okay sir, and just the last question. So it was regarding the on the export side now that we are seeing the NATO rearmament plan and as we already know we are doing a substantial export to the UK market. So just trying to understand how are we going to scale up there and is it that now we are seeing better opportunities in export also? Like earlier I remember you saying that you know our focus is the domestic demand. Like are we now shifting our focus towards export?
Srinivasagopalan Rangarajan
Our focus still remains domestic because there is a huge untapped market. We import 80% of our defense requirements in various forms though it is finally called Indian made. Lot of system subsystems in that is imported. So the focus is to try where we have competencies and technologies and IP capabilities. We can differentiate our rest of Indian companies. We would like to focus on that because there is any need and it’s a long term need to see that we can address those needs. So we will do that. But however we don’t want to. Not to look at export.
We would like to look at export. But the NATO country, whatever you’re talking about though the requirements is to scale up defense equipment, etc. They have a local supply chain. It’s very difficult to break that supply chain to build available systems and new technologies. Normally they try to do within their own country. None of the countries like to import different technologies. Nobody likes to import. Western countries don’t import defense technology from outsiders. So what really comes down to countries in India is manufacturing contracts to reduce their cost. That is really what happens though we do manufacturing also.
Our focus is not pure and fire EMS line. We are an IP driven organization. So we try to build ad value and then build IP and then sell. So where that is possible we are trying to do that. Yes, in UK we have been doing some work. We expect that to increase. We are also trying to do some more work with that same UK company. They transfer it in technology manufacturing. But these are all value driven products, not manufacturing for manufacturing’s sake. Similarly, we are trying to also look at collaborations in certain disciplines where we can not only look at contracts abroad but more importantly these can get indigenized and made Indian company for Indian markets.
We can produce them. So we’ll create some opportunities. We have to expand our scale as we go along. We have to put a marketing organization for. But this is a slightly longer term goal. Take us three years to put a marketing infrastructure and then address us in European markets. But what we can do is once the products are done in India, full products are done by us. We can also sell to far east Asian countries other than western countries. We can also sell the contract systems too. There is automatically a byproduct of what we do in India and get exported because all products are technologically advanced and second to none.
So we should be able to address the market. But that’s going to take a bit more longer. First you need food in India, then we can export it.
Krishna Doshi
Understood sir. Thank you so much. That’s it from my side.
operator
Thank you. Before we take the next question, we would like to remind participants. You may press Star and one to ask a question. The next question is from the line of Jay Chauhan from 3nait by Asset Managers. Go ahead.
Unidentified Participant
Hello, I’m audible.
Srinivasagopalan Rangarajan
Yeah.
Unidentified Participant
Good morning and thank you for the opportunity. Sir. So I just have one question. Like with companies like Astra Microwave also working in rf, microwave and data domains like what are your key differentiators when competing for renders and how does it work? Exactly sir.
Srinivasagopalan Rangarajan
We also do RF and microwave. We don’t do only RF and microwave, we already also like them. We started like a subsystem and some part of the system. We’re graduating ourselves to a complete systems company. Now there are more than 100 mechanical engineers doing mechanical design on thermal structural. So we put in people to design tool systems on radar signal processing everywhere. Similarly with IP for ew, IP and radar, IP and communication. So I think these are the differentiators. We are not on RF IQ alone, we do RFIQ also. That’s not the only end to what we do.
We want to build complete systems.
Unidentified Participant
Right sir, I understood. But if I look at the competitor, like for example access gauge, if you take an example, they are also doing, you know, complete subsystems and like in radar domains. And I just wanted to understand like how does this work in the tender system when you apply, you know, for the key components that you have in the specific product and how do you win tenders for the same? Is it divided between the companies if and how does it work? Exactly.
Srinivasagopalan Rangarajan
There are two kinds of business. One is it goes to end user. End user buys complete equipment, not parts of the equipment. The second is you design it and send it to the development agency which is DRDO kind of organizations where they design the system and ask the subsystems to be tendered out or components to be tendered out. And all of us compete for the component subsystems. So whatever you are talking about will be applicable to the second part where you sell to or go to tenders with grdo, the components lowest score kind of business goes.
Some of them goes because you have competency other people don’t have. So they do single vendor cases, some of them open tender or limited tender and competition happens. So it depends on the end use really. We are trying to. We worked with DRDU for last 25 years, learnt a lot from them and through contracts from them. Today I think the time has come not only to look at only DRDO markets, we also have to look at the mod market because the mod market now is opened up to Indians. It’s not 15 years back not open to Indians.
They only want full systems. So our focus today is to build. If you want to build scale, you want to be a 10,000 store company. It’s going to be very difficult to do this by making components and subsystems. It’s going to take a lot of time. And everywhere there is one more competitor who will come with a slightly lower cost and you will still lose the business. And it also takes development to production takes a lot of time. So we decided that we will build a competency matrix and a product capability. Build a product for the end user.
This is a game changer which is what we are putting a lot of money and development effort to. The company is changing from a component and a subsystem vendor. The system end up. This is what’s happening. So that is a change which you will see in the next two to three years. All data patterns will be making complete shift in the way the business is done by us in the last 20 years to what we will do in the next 10 years.
Unidentified Participant
Okay, sir, got it. Thank you. That’s all from my sector. Thank you.
operator
Thank you. The next question is from the line of PA Garvita go from Invest Analytic Advisory please go ahead.
CA Garvit Goyal
Hi, I’m audible the first question is on the delay that happened in this quarter approval when you mentioned some trial runs are going on. So my question is like we are saying that the testing is happening now and at the same time we are saying to Q2 we will start start ramping up. So what is giving you this confidence that even if the testing doesn’t result in execution in Q2 still you will be able to grow in Q2? That’s my first question.
Srinivasagopalan Rangarajan
No, I don’t think you understood what we’ve been talking about at all. Because what we talked about is the delay delivering a single contract. For the last one odd year we’ve been postponing quarter to quarter because customer acceptance has got delayed. That is what we talked about now and the acceptance is happening. Products will obviously meet the requirement. It is a production order, it is not a development order. There is no development in this. The repeat production which delivered first in 2005 is what we are talking in 2025. So only thing they have to come for acceptance.
Without acceptance of I can’t ship it. And that is the way the delays happened. They have been here now as long as they continue to be here and access goes on in September we should be able to dispatch. It’s not accept nothing to do with Q3 or Q4.
CA Garvit Goyal
No, actually my question was a different. But you understood. I’m just trying to understand like you mentioned on Q2 onwards ramp up is going to happen. Like we will be able to see different execution. Right. So I’m just trying to understand like this quarter was affected by the delays and that delay is still continuing. So what is giving you the confidence that on Q2 onwards we will be able to execute in a decent manner? Like is it any other project that we are working on or any other contract that we will be delivering is what I am trying to understand.
Srinivasagopalan Rangarajan
Any contract this can happen. This is the government of India. Any contact will happen. I have no control over government of India. So I. I can only answer question as I see it today. Tomorrow if the guys don’t come for inspection again, the delay may happen. I have no control. We believe it will not happen because there is an urgent need for them to develop. Already they are two years behind schedule delivery and customer is shouting end customer. So hopefully they will not put any spokes to delivery from our side is what we hope because there is an urgency to pull from the customer.
End customer. But you know, whatever I say, finally It’s a government PSUs. They decide when they pick up a product, when they don’t pick up a product. I can’t be sure that this will happen. But at the present moment, whatever indications we have, I don’t think they’re going to have a problem in the next quarter. Quarter three they don’t have a problem because they need their products urgently.
CA Garvit Goyal
And secondly on the margin front, on Y, on Y basis there is a slight dip in the margin. So I want to understand like what is the key reason for the same and because we are still sticking to our annual guidance. So I just want to understand what is the key reason why on Y our margins are low.
Srinivasagopalan Rangarajan
Margins are governed by product mix. Sometimes we take contracts with very low margins or not normal margins because we believe it’s a long term, this product will have value to the company. I can create some ip, I can create an order book which is going to scale multiple times and scale the company. So based on some strategic decision making we take some contracts with low margin. Ideally we don’t take most of the contract. We don’t take with low margins because is going to be L1 business. We are mostly not there. In most of the businesses we can also compete.
But our focus is try to build more products with more IP driven products which is differentiated from best of competition and that is how we are trying to take contracts. So that is the first part. On the second part what you are talking about year on year it has come down. What has happened is because of that one or two contracts which we’ve taken with lesser margins say last year over last year the PAT percentage or EBITDA percentage might have come down but what has not happened. If you look at is my overall PAT has gone up 20%, 25% as committed by you.
So the PAT has gone up margins is a question of the mix of contracts which you have taken consciously to see whether it adds value to the company. And if you look at this quarter gross margin is higher but since the revenue is lower, the EBITDA margin is lower. That is what I explained with this question to Phillips. So that is where it is.
CA Garvit Goyal
In your annual report this time we have highlighted many new products. So I just want to understand in the PPT also you mentioned about some new products are in the testing phase for which we will be able to get some orders. So I just want to understand on the product part like these products are. Is the data pattern only one that this kind of portfolio for these products in India.
Srinivasagopalan Rangarajan
As I understand yes.
CA Garvit Goyal
And who are the customers for like can you give us the names or the areas we are taking to buy these products?
Srinivasagopalan Rangarajan
This is one is let’s say Fire control radars airborne. We are looking at upgrade opportunity in SU530 and MIG 29 for Air Force and Navy. This can also go to LCA Mark 2 if they choose to buy it. But this is a DRDO decision. We can’t decide for them. But we are pitching for this as and when the capability is established we pitch for it. Similarly EW again for the upgrade contracts as well as the new Firecraft which is being designed in India we can pitch for both of them. Why we pitch for the upgrade contracts and build products have been issue is that there is no single company in India who have a complete product which can look at the upgrade point.
Number two the upgrade opportunity is volume business and that will be finalized in the next two years time, three years time which is a substantive business which is more than 10,000 to 15,000 crores. So when there is open market and the competency doesn’t exist or a product doesn’t exist in India in the private sector we said we can do this. The other companies used to come in with multinationals for foreigners. The foreigners will not work with the Russian companies, Western companies. So the market is then only to India. So DRDO is also doing their own products in these areas because Air Force has given them money.
Navy has given the money to build the products through them. So they are in parallel doing this. We are also in the industry. It is industry funded. Our Funded product development program which we think that we probably build a product ahead and meeting the requirement and exceeding the specifications. So this is the kind of gambit we have taken in building products. Those are all kind of products which you see. This is unique to an Indian industry context but not unique to government of India. Indian government is also doing what they are doing. But we are trying to orchid chit our systems against to see whether this can match their requirements and we can get an order book which is substantial.
CA Garvit Goyal
Got it sir. Thank you very much and all the best for the session.
operator
Thank you. A reminder to the participants, if you wish to ask a question you may press star and one on your touchstone phone. The next question is from the line of Rupesh Tatia from managers pms. Please go ahead.
Rupesh Tatiya
Hello sir. Thank you. Thank you for the opportunity. I have two questions. One on Brahmos and one on MPA Maritime Petrol Radar. So on Brahmos I, I, I heard you say that you have won some Seeker order. The clarification I am looking for is is this for Brahmos or is it for Brahmos?
Srinivasagopalan Rangarajan
Okay, I’m not. I think you misunderstand my statement. I have not reviewed the Brahmos seeker order. We had a secret order which is tested now and proven successful. We expect we have some inquiries now. We expect the contract to happen in the next month or so. If once that contract is done as a a pre development contract to a production contract we expect that production orders will start falling which is sizable value. So we are focused on making it a success. Already started development of those activities so that we can do outstanding product for Brahmos seeker and hopefully we will.
Rupesh Tatiya
But this is Brahmos or next generation BrahMos engineering.
Srinivasagopalan Rangarajan
NG is not part of Indian context. At the present moment we have not even signed any memorandum understanding with Russian government or ng. So it is still not in the play as I understand. Yes there is an ng but I don’t think we have it with us.
Rupesh Tatiya
But there is something, I mean I read some new articles that in a couple of days there is some manufacturing facility coming up.
Srinivasagopalan Rangarajan
Few articles I don’t know. 90% of these articles I’m unable to believe. Though I’m the same subject area 90%, 95% I’m unable to believe. Every week, every two days some articles are coming up and I really don’t know where to pick up the data. Really. Okay.
Rupesh Tatiya
Okay. So this is Brahmos gimbal arh you are talking about and any timelines you can give around These orders.
Srinivasagopalan Rangarajan
Some initial orders supposed to happen in the next one month, two months time. They’re supposed to call us for negotiations. And once we deliver this and qualify the system, then they said that they will place orders for production. Maybe a letter of internal production also will get placed along with this. We need to wait and watch what happens. Maybe six, nine months from now it should be under production order is what I’m thinking. Again, this is my guesstimate. It is finally Domos has to decide when it will happen and when the approvals happen for the first lot which we deliver.
But I think in that time frame we should be able to do this is what I think. And the second place which we had is on the Maritime patrol radar. We have done our end of the work and given it to drdo. DRDO is flight testing it. Flight testing is still not completed. Since flight testing is not completed at the present moment. Navy is planning to import the radars from Delta so that negotiations are on from HAL to Delta. Negotiations are on. Now we may miss the bus for the patrol radar. Because it is up to DRDO when they will position the radar and who will flight tests in Navy.
If that is done in time, maybe it will get considered. But if they delay it, then it will not get considered. But what from what you are saying is other than the Navy, it is also coastal to go for 30 plus radars. And that also is likely to happen. But timelines is something which I am not in a position to comment on.
Rupesh Tatiya
But for this mpa, this is in context of which program this is born here. 228 upgrade you are talking about or Luhi? Because that part is not clear to me. So what you’re saying is Dornier 228 we might have missed the bus.
Srinivasagopalan Rangarajan
We don’t know that. As of now the contacts have not been placed. But until DRDO proves the product, because we have only only done the hardware there they are putting the software and playing it. So unless DRDO proves it to maybe that is all the flight tests are over and completed. It will not get considered. So we are all hoping that they flight test improve it.
Rupesh Tatiya
Okay, and then this 30 radar orders which, which will that will be which platform subsequent some at some other point.
Srinivasagopalan Rangarajan
First Guard.
Rupesh Tatiya
Okay, so first lot might have El radar. The second lot onward there might be the cities.
Srinivasagopalan Rangarajan
No, no, there’s no first lot. Second lot one is for Navy, the second one is Coast Guard. What Navy bias. So we don’t know Coast Guard, several organizations. So they don’t have to Take inputs from what Navy has done.
Rupesh Tatiya
Okay. Okay. And then my final question. Mark one, A Mark one, mark two, all three programs, if you can give some idea about where these programs are, what is our contribution and when can we see some orders.
Srinivasagopalan Rangarajan
Again, this is DRDO decision who they pitch the contract to. We have Flight 41 ESN and that is EW, ESM and RWR already Flight 4 and Netra. So for Netra 1 and Netra 2 they consider it that will become a contract for us. The rest of the subsistence is all on tender radar and tender it all happens. So it will be L1 basis. So we will. We don’t pitch for it, but we are not predicting any of those things because any contract which is L1, we do not know whether we will get it or not.
So we don’t add it to the pipeline. We don’t add it.
Rupesh Tatiya
What are the timelines and number of aircraft she can return? Because I think I am hoping after operations, hopefully there is more requirement.
Srinivasagopalan Rangarajan
Probably two years since program has been approved again because of money sanctions is still gone back to ccs Once he says clears it probably might be taken. I can’t comment on timeline. It’s best that you talk to the government officials.
Rupesh Tatiya
Okay. Okay. Thank you. Thank you for answering my questions.
operator
Thank you. The next question is from the line of Rahul Jain from Lion Gob Capital. Please go ahead.
Rahul Jain
Hi, can you hear me? Thanks for the opportunity. I just wanted. I’m relatively a little bit new to the company. You consistently mentioned a pipeline of orders of about 20 to 30 billion rupees over the next 18 to 24 months, the last three quarters. Is it possible for you to either kind of give some sense of what are the key programs one should be looking at to get a better sense of when those orders could come or the other way to look at it would be, you know, obviously the India defense budget is going, but there are any specific areas we should be following up on to get a better sense of the opportunity in front of data patterns over the next few years from ordering perspective.
Srinivasagopalan Rangarajan
Okay, last second question first. We do not do pipeline based on, you know, the budgets, defense budgets. It has got more relevance to us because there is a very, very big number and we can’t whittle it down to what really comes or where we can address the market. So we don’t look at those kind of numbers. The background is made up of contracts, what we believe will be rupee dollars. And based on contracts already delivered and approved, developed and delivered to customer. And we Expect the repeat order to happen. So that is all based on what the previous deliveries we have done.
So that pipeline and where the order should only come to us and not pay anybody else. It’s not competitive bids. But the present moment I won’t be able to give line item wise because we don’t have enquiries for them. The inquiries have to come and which will not preempt the customer also sensitive information and we won’t be able to discuss it in public.
Rahul Jain
Okay, but like any I understand obviously radar is a big part of the business.
Srinivasagopalan Rangarajan
Radar, EW a whole lot of other substance avionics, what we already delivered. All this will come into repeat done for Naval Systems. A lot of things are done with BRDL and all of them are repeat orders will happen either to HAL or Bharat Electronics. So they’ll be the overall agency to put the systems together. Finally it will come to one of those companies. But the timing and the value proposition I won’t be able to tell you. I have some idea but I can’t diverge that in open discussion.
Rahul Jain
Okay, thank you.
operator
Thank you ladies and gentlemen. That was the last question for today. Due to time constraints. I now hand over the conference to management for closing comments.
Srinivasagopalan Rangarajan
Thank you all. Thank you for the patience. Thank you for tuning in and listening to our commentary and the interest shown in data patterns. I just need to conclude saying that again we’re very bullish about the future markets and what we’re doing it. I think we’re doing a lot of right things in data patterns. We have a differentiated product, we’re building competencies is very differentiated west of India we’re building products which is equivalent to what western countries are offering in their in Europe and us. So we believe as a product what we would like to develop is second to none.
And there’s a huge need in India to make it India. But though we talk about make in India, the processes to tune to make in India is also very tough. There has to be an Indian content kind of quality requirement. Design in India content is not specified. So it also allows import to happen from various quarters and does some value add here and sell to India. So this also allows a lot of imports to happen. But we have taken a hard route of trying to design and develop in India and address the market with Indian ip.
If Indian IP is developed we can also export it to the rest of the world. We believe that is a way to go awarded a longer term and we’ve taken the longer route and harder route considering that we’ve Been in business for many years. We built up ground up development thanks to ISRO and drdo. We’ve done the product development in house and competencies are developed in house. We decided that that’s the right way to go. And since there’s a huge untapped market in India I think we should be able to get a percentage of the market.
However we have products to address the market. That is why we took money from the market of finer crores to do the product development activities. Those are spent wisely and we are counting the pennies to spend the money. They built the products in AW. It’s a very very modern product for AW suite. We also developed fire control radars for Sky 30. They’re already doing remicade systems, transferable SDR and whole lot of other products for the Make2 program for EW ground based and radars which we are trying to participate in. I’m sure some of them will be successful.
The combined market we are trying to address in all this is more than 25,000 crores. So even a percentage of market I think is substantial though we are not going to be happy with the percentage we would like to take. The whole market being ahead of others we are trying to see how to do this. The the customers have been positive, Navy and Air Force particularly very positive to whatever products we are demonstrating and showing to them. They are giving the full support to us offering the aircraft to us to see the upgrade and that testing can happen on which they will probably spend more money than we have spent on product development exercise itself.
So I think everything looks good now. The products are coming out very well. It is going to take some bit of time to convert these large opportunities and make it as an order for a revenue. We are also putting infrastructure build the capability to manufacture them, build people to see that this can be delivered and also support these systems. All of them are happening parallel. We are investing steadily ahead of time see that the company in the next three years time to scale to a multi thousand crore company revenue. This is what our interest is having been in this business so long.
We want to be leaders in this business going ahead. We also want to focus coming down on exports to see that we are not only dependent on government business in India and we can distribute the risks across to many other agencies and be part of the larger organizations outside India. We will put our efforts going ahead to see that we build a which can also be export friendly. This is what is the idea, this is the strategy. We’re working towards this as a present moment. We believe that we are going in the right direction. And that’s all I want to leave you all with.
If you have any questions further to this, please send it to Goindia. We’ll be more than happy to answer the questions. Thank you once again for listening in and the interest in data packages. Thank you all.
operator
Thank you. On behalf of Goindia Advisors concludes this conference. Thank you for joining us. And you may now disconnect your lines.