Thank you. Good morning, everyone, and welcome to Data Patterns (India) Limited call to discuss the Q3 and 9-month FY '26 earnings.

We have the senior management of the company on call: Mr. S.

Rangarajan, Chairman and Managing Director, and Mr. Venkata Subramanian, Chief Financial Officer.

We must remind you that the discussion in today's call may include certain forward-looking statements and must be therefore viewed in conjunction with the risk that company may face. 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&A. Thank you, and over to you, sir.

Thank you, Monali. Good morning, ladies and gentlemen, and thank you for joining us for the Q3 and 9-month FY '26 earnings call.

I trust you had an opportunity to review our earnings presentation available in the stock exchanges and on our website. FY '26 is shaping up to be a good year in line with our expectations.

Our order book has reached an all-time high of 1,868 crores, largest in the history of Data Patterns, underscoring our strong execution capabilities, deep domain expertise, and growing relevance within the defense ecosystem. Order inflows during 9-month FY '26 and till date have remained healthy and well diversified across services and applications, reflecting increasing custom acceptance of our products and solutions.

Key wins during the period include large production and development orders for electronic warfare suites from ECIL and the Ministry of Defence, further strengthening our position in high-value mission-critical programs. Our export order book remains healthy at approximately 63 crore, and exports continue to evolve as an important pillar of our long-term growth strategy.

We're actively engaging with our customers across international markets while strengthening our export-focused marketing and business development activities. We continue to execute regular business from the UK and expect export momentum to improve further as our complete system offerings mature.

We believe this strong momentum is sustainable. The recent Union budget has also reinforced the government's long-term commitment to defense modernization and indigenization with a meaningful increase in capital procurement.

The sharp rise in allocations of our other equipment, including radars, electronic warfare systems, missiles, and advanced electronics, clearly signals a focus on new-age defense technologies. This aligns extremely well with Data Patterns' core strengths and long-term strategic action, positioning us favorably for future growth.

Let me give you all a brief overview of financial performance. During Q3 FY '26, we delivered a strong quarter with revenue growing 48% year-on-year to 173 crores, supported by improved execution across defense programs.

On a 9-month basis, revenues increased 86% year-on-year to 580 crore, reflecting our meaningful scale-up in defense-led execution. EBITDA for the quarter stood at 70 78 crores, up 44% year-on-year, with EBITDA margins sustained at a healthy 44%.

Profitability remained robust, with PAT rising 31% year-on-year to 58 crore, translating to a net profit margin of 34%. Overall, we are pleased with the quality, consistency, and resilience of our earnings.

In addition, we're pursuing co-development activities with global defense majors, particularly in radar and electronic warfare domains. These partnerships are aimed at developing solutions not only for the Indian defense requirements, but also for global markets, enabling us to leverage our competencies on a worldwide scale.

We are also engaging with Indian large corporates to build an Indian defense ecosystem. We have partnered with Bharat Forge to bid for the AMCA production and are one of the three shortlisted to get the RFP.

We're also attempting to develop other electronic systems to strengthen the Indian content with Indian IP with Indian large corporates in line with the GOI stated objectives of Atmanirbhar, besides providing a competitive edge to our partners. We're actively involved in developing the smart cockpit and mission systems for LCA Mark 2, which we believe will be adopted for AMCA.

We're also offering the advanced sensors like infrared search and track and missile approach warner for LCA Mark 2 in partnership with a European partner meeting Made in India content. Strategically, Data Patterns is steadily transferring from a subsystem supplier to full systems and solution provider for the defense sector.

Our focus is not limited to any single platform or application. We're actively pursuing opportunities across radars, electronic warfare, avionics, seekers, and other mission-critical defense electronics, and we selectively undertake strategic contracts that offer long-term relevance and scalability.

We continue to invest ahead to offer strategic systems with in-house IP meeting user timelines, which will give us a competitive edge. Our internally funded development are advancing well and should be offered to the users in the coming years, which should scale our revenues.

The long-term goal is to scale revenue meaningfully for the next 3 years while maintain high profitability, technological independence, and selective global expansion. Looking ahead, with strong policy environment, rising defense allocations, increasing indigenization, and a clear shift towards advanced electronics and systems, we believe Data Patterns is well positioned to benefit from long-term defense spending.

We remain committed to delivering 20% to 25% revenue growth for the medium term, maintaining healthy EBITDA margins, and preserving our net debt-free balance sheet. With that, I'll now request Venkat to take you through the financial performance

in detail. Thank you, sir, and good morning, everyone.

I will take you through the key highlights of our financial performance for the quarter and 9 months ended March December 31, 2025. Q3 FY '26 revenue stood at 173 crore, registering a strong 48% year-on-year growth driven by improved execution across multiple defense programs.

Revenue for 9 months FY '26 increased sharply by 86% year-on-year to 580 crore, reflecting significant scale-up in operations and sustained execution momentum during the year. Production contributes highest to the revenues at 57%, followed by development at 37%.

EBITDA for Q3 FY '26 stood at 78 crore, up 44% year-on-year, with EBITDA margins maintained at healthy 40 44%, highlighting the strength of our operational model. For 9 months FY '26, EBITDA grew at 42% year-on-year to 178 crore, supported by favorable execution mix and operating leverage.

Net profit for Q3 FY '26 was 58 crore, up 31% year-on-year, translating into a net profit margin of approximately 34%. PAT for 9 months '26 stood at 133 crore, reflecting 23% year-on-year growth despite quarterly variations in execution mix.

Gross margins remained strong during the quarter, reflecting the high-value nature of our product portfolio and strong in-house capabilities. Overall profitability continues to remain healthy and resilient.

Working capital remains well controlled, and we continue to focus on efficient execution and prudent capital management. With a record order book, strong execution visibility, and disciplined cost management, we remain confident of achieving the full-year revenue and EBITDA margin guidances.

That concludes the financial highlights from my side. Thank you.

Hi. Good morning, everyone, and thanks for the opportunity.

Congratulations for a good set of numbers. A couple of questions from my side.

The first one is going back to the EBITDA margin. 46.5% is a number that no other radar electronics company has achieved in the world possibly at this point in time.

While you highlighted in the prepared remarks that it is on the account of favorable execution mix, but what we see in the execution mix that avionics is coming, there is EW systems. It's all about our core platforms that are coming to fore.

That seems to be sustainable. Just wanted to understand that what kind of EBITDA margins do we expect given that these are your focus areas in the future as well?

See, EBITDA margins is a composite addition of various contracts executed during the quarter or the year. It will depend on the competitive scenario plus what products we're really doing and how much of it is designed by us and how much bought out is going to be there.

What you see when the EBITDA margins are higher, rather the gross margin more importantly than the EBITDA margin, is being products which is completely designed in-house. Why is that higher?

Because the building blocks which some of the companies import, even including large corporates outside India, then they build the overall system based on the building blocks imported or bought out. Whereas we actually design the building blocks, we work on a raw material cost and write off the revenue expenses on the year of development as part of our P&L.

When this adds up and you use our own kind of building blocks into end systems, the gross margin goes up. You need to keep in mind that we have done all the development and there is a cost attached to it, has actually been written off.

If you had to not do that, then the EBITDA margins will probably be much lower. That is to answer this.

Then generally, we try and address markets based on our strength of products rather than compete in every area where we buy and sell or trade or integrate alone. We do not participate in such contracts.

We participate to build IP and those contracts where there was a lot of deep IP content, that is where we participate. Largely, the EBITDA margin should be similar to what we have been presenting till date.

Of course, there'll be changes because some systems integration happens, and like trucks have to be brought and things like that on a system level. In those contracts, the EBITDA margins or the gross margin comes down, and consequently the EBITDA margin comes down.

I hope I managed to answer your question. It's not a straight answer because the EBITDA margin is a mix of so many things as part of the execution of various kind of contracts we take up.

Quite clear, sir. The second question is essentially on exports.

Now looking at the current EU-India FTA and the possibility of some of the big-bang deal happening, particularly on Rafale, and there could be some reciprocal element to it. While I don't want to go into that, the point is that we have made a good foothold in export market now with PAR and all, and export revenue is 9.

9.6% in this quarter. Just wanted to get a sense on what all products we are kind of seeing a good traction in the export market, and how this EU-India FTA is going to help us.

From a overall perspective, from a macro sense, if you can give us some picture on that, sir.

The opportunities are fairly large in the world market today. Earlier, India used to be a low-cost country sourcing for the world market, and but what we have done, what we are doing is actually IP-driven products.

There's a shift in what we do and what typically is imported, especially in the defense scenario. Of late, because the spend in the European market is going to go up due to geopolitical environment, I think there's an opportunity for us, I mean companies like us who have strong IP-driven product development capabilities, participate and address some of the needs where they will be spending.

We need to do a lot more work in the export market, go meet people, talk to them, invite them here. All this has to happen.

We've already started doing this before the FTA was signed, and there has been some considerable traction with a few companies, and they've shown very a lot of interest in what we're doing to see whether this can be deployed or used or modified for their requirements in their in their avionics and other areas of operation. We've started getting RFPs from them, and hopefully this will all turn out into contracts going ahead.

We need to these are early days. We need to actually do a lot more work in the export market, put a team together, and drive the export market with a on a consistent basis to see that 2, 3 years down the line, we have a steady business which can scale.

We have competitive advantages in terms of competencies, which is world-class. Second, our cost of development is far lower than the cost of development in Europe.

Third, our, since everything is done in-house more than what the large corporates do there because they rely on a lot of subcontractors to do it, we're able to bring an economy of scale and cost to them. Fourth, the time frame which we can deliver, they're just astonished that we can deliver these things in time frame which they never imagined is possible.

They like that especially because they have a need, and the need has to get unaddressed, and they're not able to actually deliver to their customers for a few years, and we bring in that additional strength to see that deliveries can happen early. On top of that, we're also willing to co-invest in some of the product development which can be well to use worldwide.

This is also of interest to them. Since we have raised money and we have money in our kitty, we can co-invest not just looking at Indian markets, but also world market as we go along.

There's a multi-pronged strategy on exports which we need to formulate, and we're thinking about it, put a team behind it, and start this activity probably next year early to see that some traction happens and export is possible. We're also attempting to do such similar things in the US markets.

Now the trade agreement with the US is also done. The the the duty structures have come down.

I think we should be able to get some early wins and all. This will take some time because it'll be early wins for where they get used to our culture, our quality, process, etc., etc., because these are all certified programs.

Once the confidence comes, I think the scale can happen much faster than what we can do in India. We are seized of the opportunities.

We understand it. We are very excited about the opportunities happening, and especially it fits our kind of development capability we've done.

We have about 1,100 engineers, recruiting another 150 this year this year. We're building a competency skill which will be useful in these areas.

Earlier, the opportunities were not there. The opportunities are opening up now.

I hope we're able to address the opportunities satisfactorily and grow the business.

Great, sir. Thank you so much, and all the best.

Thank you.

Thanks for the opportunity, and many, many congratulations to the management team on a robust quarter and healthy growth and inflows. Sir, my first question is with regards to the inflows themselves.

The PPT and the press release mentions that orders negotiated, which are not awarded as on date, stands at about 11 billion rupees. Just wanted to understand by when do you expect these orders to be received, and what could be the broader mix between development and production within this?

Any large orders that you'd like to highlight, which is within the orders that are negotiated?

I think these contracts should happen in the next 1 to 2 months' time because these are only document work which has to be done and signed. I think next 1 to 2 months' time, these should get converted to contracts.

This consists of a large portfolio of products, some in the development area, but again, like I said in the earlier question, we've taken up contracts which is in the core competency area of Data Patterns. It is more of redesigning what has already been designed for a different application, airborne application.

That is one of the larger orders we've got, which we should be getting or signing. It's in line with our competencies.

That's all I can say at this point. I don't want to get into exact nature of the contract.

I think once contract comes, we will discuss it more in detail.

Fair enough, sir. With these orders coming in, we could possibly be looking at an order book of about 18 to 19 billion whenever they come, which will be very sizeable.

Like it was mentioned in the PPT, the highest ever for us. What would be the execution cycle, to speak, for this order book?

Again, it varies. There are service orders as part of the contract, AMC, etc., which will be done over many years.

The order delivery itself, some can be delivered next year, some year after next, etc. Again, it depends on the contract.

There are multiple clutch of contracts which have added up to this 1,800 crores. Very difficult to say exactly.

I have not done the arithmetic to see that. We will be doing it now.

These are not the only orders. We also expect to sign more contracts in the next 2 to 3 months' time, probably another 5, 600 crores of contracts which can get signed.

During the course of next year, we are also looking at a lot number of single data contracts based on what has already been designed and developed. That also is expected.

The order book is expected to grow, and we are trying to see whether advance action on production can happen so that we can scale the business substantially in the next coming years.

Understood, sir. My last question would be with regards to the working capital cycle.

You mentioned in the opening remarks that it's been fairly contained. Could you please put a number on that?

In addition to that, our cash on hand is at the lowest in the last 8 to 9 quarters. Could you also please deliberate into what kind of receivable cycles you're looking at within that working capital cycle?

Can you repeat the first question? I couldn't understand it.

Yeah. You mentioned that working capital has been largely contained.

If you could put some number to that as to what kind of working capital days we're looking at. Secondly, our cash balance is at one of the lowest levels in the last 8 quarters.

How are you seeing this situation, and do you expect some large-sized receivables that are sort of materializing in the near future?

I'll answer the second part of the question. Venkat will answer the first part.

The debtor situation has been extended, but we are expecting all the cash to come in the next 3 to 4 months' time. That is again take care of the cash-on-hand situation which you talked about.

There are some large development contracts we had taken the last year and year before last, and they're in the final stage of acceptance with the customers on integration. Once that is done, we expect the money to come in.

These are large-value money which will be coming in, which will recharge our cash battery. That is going to happen in the next 2 to 3 months' time, maximum of 4 months' time, I think, to collect all the money.

That is one. The other one regarding working capital, I think Venkat will answer this question.

Yeah. You see, working capital, it was around 428 days in March.

We've not published the balance sheet numbers for December, but internally, it has come down to 340 days. We expect it to be remaining at the same level by March-end also.

Going forward, once all the collections happen, this will improve. As we have been mentioning in our earlier calls also, over a next probably some 3 to 5 years' time, it will gradually come down to 270 to maybe 300 days.

That is working capital cycle that we are expecting. It is in line with our expectations only.

Collections on development contracts is getting delayed. The production contracts, we are able to collect it faster.

We expect maybe around 270 day to 70 to 300 days of working capital cycle going forward, sir.

We also get advance against all these contracts to help us. The net borrowing from banks is actually zero.

We only work on bank guarantees. Non-fund limits is what we're working on.

That is also the second point. Third is this we've taken very large development contracts last couple of years, and all of them have very high potential of multiple times getting into production orders, which can be a few thousand crores each.

We've selectively participated in programs where it will give us long-term gain on a large scale, which is what the company has actually been working towards. The whole organization is working towards scaling up the technology.

It's in line with what we're expecting, and this working capital is larger because of development contracts.

Hi, sir. Good morning, and congratulations on a healthy execution.

Sir, my first question is relating to the order inflow. We usually mention that our order pipeline is close to around 20 to 30 billion in next 18 to 24 months, and considering that we are looking at a strong order wins in fourth quarter, would you like to update on the order inflow guidance going ahead as well as to what we are seeing, especially one is overall order inflow and another is on the recurring side of what kind of recurring orders can we expect going ahead?

I won't comment on the recurring orders, but I can comment on the order pipeline. Products we develop now, we can expect another $2 to $3 billion of order pipeline and capability.

Matter of fact, in a couple of years, I think it should go much beyond that if what we think is going to happen. Of course, we have no control over the market and the timing of when the contract, because it's government.

All my business is government. The products we have developed and how it's been appreciated by the customers and the quality and the reliability of the products and the advanced nature of technology which is provided in the product, the requirements which we have quoted against and got the development contracts are all large-value contracts going ahead, multiple systems required across India.

If this is fructified, our order book situation should scale up multiple X times in the next couple of years, 3 years' time is what we expect. We've been driving the product development activities towards creating substantial revenues, and we are in track at the present moment.

It's still work in process because the orders have not come. Products have been delivered, but in our mind, it should turn out to be large contracts going ahead.

This is one. Second is with our initiation into export markets also, we believe that this also should take off and start giving us some repetitive business which you talked about, probably another couple of years down the line, both in civil aviation as well as defense equipment.

We're working on both sides with a few companies. We can scale up the number of organization and get their initial buy-ins and initial products inside.

I think the next 2 to 3 years, we will probably get repetitive business outside India. Here in India, mostly it's project-based, we're not able to predict repetitiveness.

Though we get into AMCA program and LCA, some helicopter programs and all of them, there is plagued by delays on deliveries from our Indian customers. Back-to-back, our product deliveries also get delayed, acceptance get delayed.

In a mature market where there is a need, this is predictable business is what we expect. Whatever orders we're getting from UK, it's a predictable business.

They give you a long-term order with monthly deliveries. We want a portion of our turnover to at least be that so that we can regularize this.

This ups and downs and unpredictability in the market, we would like to do that. Strategically, I think that is necessary.

We're working in both ends of the spectrum to see that we don't miss out on opportunities in India, but also bring in some repetitive business in the export markets. We're working on both.

It'll take a bit of time because these are opened out just now to us, and we have to focus. We've been looking India all through our life.

Now focus is also shifting for India out of India along with the concentration in India. We are aware of the opportunities, and we are aware of how to scale this business, and guided by our goal, I think we are on the right track, and we are very excited about the opportunities lying ahead.

Got it, sir. Sir, that's very encouraging.

Sir, my second question is on the BrahMos side of it. In this year also, major order received, we are looking at missile from BrahMos.

Is it like a new product? Any update on the seeker trials that were ongoing from BrahMos?

We have completed the seeker trials. We've got a development contract with marginal differences which will go into production orders.

We'll be delivering it in the next 1 to 2 months' time, ahead of schedule. I think we've done a good job in the product development.

It's a reliable product. Once that is done, we expect BrahMos to to give us start giving the production orders.

We've also gone ahead and ordered the equipment for production testing, so that will be arriving in the next 3 months, 3, 4 months. We can set up a line for series production with month-to-month deliveries can happen starting '26, '27.

This is one area we've done. Second is, other than BrahMos, we've also done a missile-to-missile higher-band seeker.

That is also in advanced stage of delivery development and delivery. We expect some repeat contracts there.

We want to focus on this kind of seeker capabilities with other OEMs to see whether we can use this for other OEMs, modify it for other requirements also. The seeker should start in I know we can't put a timeline, but what we hear is it should start by this year onwards.

This this calendar year, that is financial '26, '27, we should start getting production orders.

Got it, sir. Sir, congratulations on the BrahMos order.

It was a long-awaited one. I'll fall back on the queue for further questions.

Thank you, and all the best.

Hi, sir. Thanks for the opportunity.

Just want to ask on your order flow. Last quarter, you mentioned in your press release that you had about 550 crores worth of orders negotiated, but yet to be received.

This quarter, our order flow was about 240 crores. You've also mentioned you have about 1,100 crores worth of orders negotiation completed.

Just wondering, 300 crores from that last quarter's number has spilled over and is part of this negotiated orders, and that's first clarification. Could you clear that?

Actually, I've not done this calculation the way you're asking. Maybe you can write to Go India, and we can write back to you.

Let me look at the order, what was told last quarter and this quarter, and see whether there's an overlap or already it's been received. Let me do this exercise and get back to you.

Sure. No problem.

Just on the timelines of these orders, you mentioned 1,100 crores, you're expecting this in the next 1, 2 months. The other, in your presentation, you've also mentioned another 500 crores on top of this, right, which could also come this quarter.

Are we expecting around 1,600 crores worth of orders this quarter itself, or could some spill over to next year? Just wondering on timelines.

Should happen this quarter.

Understood, sir. Thank you so much.

Hello. Am I audible?

Hi. Is it fine now?

Yeah.

Hello. Yes.

Sir, most of my questions are answered. Just one clarification on this industry-wide shipbuilding CapEx happening over the next few years.

How does management assess the addressable opportunity here? Any of our product categories falling into that opportunity, sir?

We've not actually addressed shipbuilding as such. We work on equipment, and we've not done any development on the platform management systems, things like that, bridge management system, so many other things on the ship.

They've been traditionally, they've been importing, and there are companies who actually focus on it many years. We've been actually working on sensors quite a lot, and we've not done so many work on that.

What we are trying to do is some of our upgrades for Navy, trying to offer our electronic warfare suites, some of the radars, etc., and see whether those opportunities can be addressed. Presently, we are engaged in this kind of line up things.

We've not actually looked at new ship buildings. We have, of course, made some offers, but we've not got the contract though we were lowest quote.

For example, TACAN and some things goes into ships, tactical air navigation systems, things like that. We have products for these kind of things.

Not yet got orders. We need probably to pursue such contracts, but at the present moment, we don't have anything which we can say is going to give us some regular returns.

Understood, sir. Secondly, on the exports part, you are very bullish on export as export will provide the better revenue visibility as well as you mentioned to one of the participants.

Going ahead, currently, it is 9%, 10% of our revenue in this quarter. Over the years, how much percentage of export do you expect to the overall top line, sir?

Very difficult to answer that question presently. What's happening is our Indian revenue model is increasing year to year, and it's going to be substantial increases going to happen in the next 2, 3 years' time.

I don't think the export will keep in pace with that kind of increased revenue in the domestic markets. The focus is in Indian domestic markets.

What we do over a period of time, maybe 3 years down the line, we will have to build an export business which is sizeable. Then we can talk about numbers which is meaningful.

Today, it's very difficult to talk about this. To answer the other question on the shipbuilding, shipbuilding not there.

We're also working with some foreign companies to see whether we can do Indian content for modernization of gun control, radars, IRST, that is infrared search and track, etc., which are modern sensors and fighting equipment necessary, and our ships have got old equipment. There is a requirement to modernize these kind of ships.

The advantage is that if we can get in, of course, it takes time to prove the system on the ship and then get the enquiries, and it's a 2-year kind of time frame or maybe more. Once we get in, there'll be a number of ships which needs upgradation.

That will give you regular business year-on-year. We're working on some kind of programs like this where a lot of Indian IP is there, but we don't have all the applications in various areas, for which we get partners, and application orientation they have, we use, manufacture in India.

The main part will be designed by us in India. The IP content is still retained, and that will be based on our core competency already developed.

We're addressing the market in different ways. I have not projected all this.

These are all potential business, but not projected because we're not sure when it will happen, what is the size of business it happens is not sure. Like this, we are attempting a number of programs which can come out of a core competency, product competency built by us.

It can be used in various kinds of platforms. That is why in the opening remarks, I said we are not platform-specific.

We can do a number of platforms. The capabilities of IP generated can go to very, very many platforms.

We have to go through the end, go through the process, go through certifications, qualification, install the systems, and see where it goes to bring in scale, which is what we want.

Got it, sir. One last thing, regarding the

It is not Jyoti Kaur, it's Jyoti Gupta. Good morning, sir.

Thank you for the opportunity. I wish you swift recovery and great health and great set of numbers.

One, just wanted to ask this sudden increase in your revenue, any specific orders that has been delivered, if you can elaborate. Second is, what is the status on fire control radars?

Do you expect any orders coming through in the next couple of quarters, or what is the status that you anticipate in the future?

To answer your first question, it's not sudden orders. There have been delays in getting the orders.

It's got delayed very badly. We expected it to happen much earlier.

Because of some process, it's got delayed. Got bunched up now.

It's not nothing sudden. This all started work 2 years back for all these contracts.

Suddenly, we don't get orders like this. This is not sudden.

Second is the fire control radars are still in development stage. It's going to take some time before this can realize order potential.

See, we have taken QIP money to invest in large development activities, which can give substantial revenue business, 10,000, 15, 20,000 crores of potential revenue. One is the fire control radars.

Second is the modern EW suite, which include the podded jammers and the radar warning receiver and the ensuing kind of subsystems. All of this completely designed by us.

Matter of fact, as we speak, the users are in our office actually demonstrating the products which is already been designed. These are all on track, but it'll take time.

It happens, you're talking about order book which the requirements are above Rs 10,000 crores. That is why the development cycles are also going to be long, but we have to certify it in the air, put it in Su-30, etc.

This will all happen over the next 2, 3 years' time. The next 2, 3 years, we have to continue with what we're doing, see the order book scales, the revenue scales, and we meet market expectations and our own ambitions to be a large corporate pretty short.

This is the path in which you're going. We're building products for maybe 4, 5 years down the line, which will convert into large orders.

We have a short-term kind of targets and a medium-term target and a long-term target. We're trying to see how to address all of them and build products.

See, the important thing is build products. India is bereft of products because we've always been importing products.

We want to build products in India, increase the total addressable market, and then compete. There is no point in my saying 3 lakh crores is going to be spent in India on defense CapEx because we cannot address those 3 lakh crores.

We have to look at more what is addressable by us, and the addressable market has to be increased so that we have a percentage gain in this, which can be competitive capability, etc., etc., whatever we need to do, how to address the market, and be ahead in that we need the latest, modern, worldwide, world-class systems. The attempt is to try to increase our TAM, and that's what we're trying to do with products.

There will be deep products which is world-class and highly reliable. The focus is developing such products, and fire control systems, radar is one such products.

We also see that with the international companies coming in to speak to us, they are also excited with some of our products we're doing. They also have some up-to-date systems.

We look at their options, upgrade programs also, and redesign the products already designed by us for Indian to suit the end customer requirement. That also we're on the job, which is also from the same core competencies, we build multiple solutions, which can also help us reduce risk and also give a repeatable business going ahead.

Good morning to the team. My first question is, looking ahead, how do you see Data Patterns balancing between expanding its order book, ensuring timely execution of defense projects, and maintaining profitability?

As the defense electronics space evolves with newer opportunities and customer requirements, what will guide your decision-making process on where to place the strongest focus in the coming years? That's my first question.

I'll ask my second question after this. Thank you.

It's a bit not very clear question. Can you put it in fewer words so that I can answer the question?

Because you talked about defense and modern electronics and reliability and all that. It's what we're doing already, but I can understand the question.

Sure. I'll just rephrase it.

I want to understand how do you decide when growth through new orders should be in the top of the list or when execution discipline or margin protection becomes more important? Basically, what is the thought process behind shifting focus as the conditions change?

We are very clear about contracts which we pursue. We want to build a profitable company.

We're not going to be going after revenue business. It has to be bottom line-driven business.

We're very, very clear about it. We've always been doing that.

It has to be IP-driven. It has to differentiate.

It has to allow us to build more products because without bottom line, you won't have the money to build additional products and scale the company. Yes, it's a longer harder work.

There is no easy way to it. Our past 30-odd years, we've been doing that.

Now that the foundations are built and deep skills and product capability has been built within the company and infrastructure built, we don't see why we should change this to suddenly go into revenue business model and see that growth happens for revenue business at the cost of bottom line. We think that is not the correct thing to do, especially for the DNA of our company.

This is one. Second is the opportunities in India is scaling up substantially, and that scale-up is happening.

Looking at Make in India as a mandatory requirement, I think it supports the way we have been thinking about Make in India. Matter of fact, the last 20-odd years, if you come to office and exhibitions of ours, we always have a byline, Made in India with Pride.

We take pride in our products. Because we take pride in our products, it's a reflection of what we are.

We believe it has to be world-class. It has to be reliable.

It has to be world-standard. We are trying to attempt quality standards to that extent and go by it.

We continue to go with the same DNA and our approach. We're not going to change that approach.

This approach is going to give us huge benefits going ahead. How do I scale the business if it's going to be only bottom line?

We quote or invest in products where there is large market available and the gaps are there. In the scenario of Indian markets, there are gaps which is not filled by others and probably filled by foreign company OEM, international OEMs.

We try to address those gaps and try to replace those gaps with Indian products at a much lower cost, and also see that we have it customized to the customer requirements much faster ahead of time. The support, which is going to be obviously much, much better if designed and made in India, will give you long-term support.

We invest ahead to see that the product's available when the customer requires. Yes, we take a risk of doing such things, but we want to differentiate ourselves from others.

We build the product, and we incrementally building the products with four IPs. Our risks that way is also protected or not very high.

This is our DNA, and this is how we want to continue to do business. I think we are at the right time and at the right place, not only for Indian context, but also international context.

Though we don't have exposure in international business, we make attempts to see that our presence is there, and we start slowly scaling to international business also. Indian focus is going to be the way we are.

I think the scale is going to happen by itself. We are on the right track with the right products, and I think scale will happen.

Thanks for the opportunity. Congratulations on the great set of numbers.

I just have a couple of questions. You did mention the TAM of about 15,000 to 20,000 crores.

What is the SAM from that? May we see the flow of this cross in terms of timeline?

I didn't understand the first part. The second part, timelines is probably another 3 to 5 years.

What is the first part?

Okay. What you mentioned the TAM is 15 to 20,000 crores, and what is your serviceable addressable market from that?

When I say addressable market, TAM is addressable market, 15, 20,000 crores, or much beyond that. If you take variants of what we develop for other programs outside India, it'll probably go more than 20,000 crores.

That's the reason we're putting deep money and larger development cycles to see that we address the market with a product which is not available in India.

Hello. Am I audible?

Yeah. Hi.

I want to understand from you, although you addressed this question related to this to the earlier participant, on the current competitive landscape, particularly on our product category, as I am seeing many many players are now speaking about radars and EW space, spending on the R&D and the product development. I agree that we are ahead in this journey, but going ahead, if the competitive intensity rise and ultimately it is a tender-driven business, how do you see in the terms of protecting our margins in the medium to long-term?

We need to differentiate ourselves from competition. That's the only way we will get differential treatment.

That's one. Second is, though there are a number of companies talking radars and EW and all that, they're not developing all the portions of the radars.

It has to be a collaboration or a number of companies have to do these parts to build a system. That also makes it more complex to build a complete system and offer a system as a system before without contract.

It has to be more as to tender-driven and component or subsystem-driven where they become lowest quote in each of the subsystems and then try to get the parts. That doesn't give you a flavor or a competency to build the entire system.

We went through this exercise about 15, 18 years back and decided that this is not going to scale the business. We need to build IP and build all parts of the system.

It's taken us time, build it, get reliability, and build that competency. We are now here what we are.

Yes, competition is nimble and capable, and they will catch up. They will probably be even better than us.

We need to see what the landscape is and how we're doing it, and address the landscape and see what we're doing there. We want to get the early buy-ins.

Once the early buy-ins come, a number of years, the contract is protected. We're going to look at opportunities like this, get early buy-in, and see how we remain ahead of the game.

This is what we need to do. We have to be watchful, build competencies which is differentiated, and address the customer requirements better than others and be competitive.

Coming on to the bottom line, bottom line is the last portion which I look at today because I can compete in almost all contracts in DRDO today. We can do everything what electronics DRDO wants.

We don't do this because for the exact reason what you've said, a number of other competitors and subsystems who want to go in for the L1 business to get a handle into those areas. We don't want to prove ourselves again and get a handle and go that path and put our efficiencies and our bandwidth in such programs.

We rather focus the bandwidth and build end products which can scale substantially going ahead. We differentiate the contracts.

We choose contracts what we want to build on, and try to go after contracts which we think we want to do and be competitive there. It's a question of strategy, how we want to scale the business, and we are clear about what we want to do.

Look at opportunities individually. Look at whether it's going to be strategic to our thought process of growth, or it is going to be one of those systems where you'll be only L1 to keep our engineers engaged.

We don't want to keep our engineers engaged at this present moment. They're all heavily engaged.

Everybody's working 7 days a week. We will differentiate based on the tenders where we go.

In the meantime, we'll build without tenders, we'll build our own products, be ready for future orders as and when it happens. We believe it will happen.

Good morning, sir. My question is on the seeker side.

When you talk about 1,500 crore kind of order expected in next quarter, you are not including seeker's order, right? That production order will be after that.

That is one clarification. I'm sorry

Yeah. Yeah.

Is this better?

Sir. My question was on the seeker business.

When we talk about 15 billion kind of order inflow for Q4, we are not including the seeker production orders. Is the understanding correct?

That is the clarification I want. The question is also on the production line we are setting up.

You talked about other than BrahMos also, we are looking at other seekers. We are setting up maybe 15, 20 seekers a month line, or smaller or a bigger line?

That is on the seeker side question, sir. One final question on Sukhoi upgrade also.

Given we are doing pods and other things, is it safe to assume including everything, it's maybe a 300 crore per plane opportunity for us? These are the two questions, right.

The seeker business production order is not included in the next few months' order book. That is not included, point question number one.

Question number two is, there's no requirement for 20 seekers a month from the present contracts. We want to put infrastructure to do that.

We have infrastructure planned to address customer requirements and thought and deliver ahead. As and when the requirements go up, we can always scale up our infrastructure quite quickly since everything is designed by us, even the testing equipment is designed by us.

We can have anything can be scaled up quite quickly, and we have infrastructure done. We're also putting up additional factory, which is going to come up in the next 1 to 2 years' time with a large space available for production as well as design.

We are constantly investing in infrastructure, CapEx, to see that we are ahead of the game, delivering ahead of the game so that we continuously do it. This is on the first part of the seeker business which you talked about.

The second part of you talked about is Su-30 upgrades. I don't think at the present moment, we're looking at 300 crores because see, these are upgrade programs, and there's no contracts.

We're actually going, building the products, going through certifications, and immediately, directly on 100 kind of seekers, 250 seeker, 250 Su-30s, I don't expect government to place orders for all of them one shot at 300 crores per aircraft to an organization like ours. Initial contracts which has come to HAL is about 84 aircraft, and that value is anywhere published.

We're trying to see whether some part of it can be done. It's not our pods and whatever you talked about.

As and when our content on the things go up because it's not very simple to get content on aircraft because they're a private sector. Information on, HAL would like to do a lot of things themselves, and it's going to be very difficult to get the content as we go up.

We're taking opportunity where gaps are available, address the gaps, and we will see when the confidence of the user builds up, we can get more content and then increase our scale per aircraft. This is what would be.

Other than that, pods, separate inquiries are going to come for 100 pods, etc., sets. That is separately also happening other than the 84 is cleared for HAL.

We look at opportunities, and then we will be able to say what kind of numbers we can put it there. Present moment, it is definitely not 300 crores.

Yeah. Good morning, sir.

Thank you for the opportunity. Good set of numbers.

Sir, I remember just a while back, you talked about the civilian side especially with now that we have seen news coming in from HAL is now apart from the fighter aircraft, they are now concentrating on the civilian side of the aircraft. What kind of opportunities do you see in that, any in terms of some electronic products?

What would be the kind of addressable market do you see in coming 2 to 3 years? Yeah.

It's very early stage, Jaikanth. We can't comment on it now.

We are exploring opportunities. We are trying to work with one or two OEMs, see whether we can do some products with them.

It will take some more time, maybe a year or 2 years or 3 years, 4 years before a predictable revenue model can be told to market to investors. These are all exploratory kind of business which you're doing.

The intent is to get into civil markets because volumes are much, much larger than defense, and it's a month-on-month capability. Once we bring in the requirements, scaling can happen quite quickly, very large scale because the numbers are very, very large.

Also cash flows are very different. As part of business initiative, it is necessarily or mandatory to see that we scale in these areas.

We're doing some exploratory work in this, but not to give you any data at the present moment.

This is regarding the Uttam AESA radar, which is developed by LRDE. My question is whether this Uttam AESA radar has Data Patterns any role to play in it?

Is it a competing product or a complementary one to our existing product line?

At the present moment, Uttam you're talking about, we don't have a role to play in it. Although it's a very similar product we've designed, and we're looking at partnership with DRDO and LRDE to see whether we work with our radar as against working only with Uttam as a second alternative.

We don't know how it goes. If it doesn't happen, we go alone and try to build the radar directly for Air Force.

Both options are open. It depends on how the alignments take place.

Presently, we don't do anything in Uttam.

Hi, sir. Am I audible?

Am I audible? Hi, sir.

Earlier, you mentioned something about AMCA, sir, that we've been shortlisted for the next round. Sir, any timelines to watch in terms of what happens next and how far are we from the prototyping stage and everything?

Related question would be, should one completely ignore the scope of HAL into this program as of now?

This is what is published, I'm talking about. I'm as knowledgeable as you are because they've not told us anything.

Maybe Bharat Forge will know a bit more than us. Regarding HAL participation, they've not been selected, down-selected to the three to receive RFP, what I hear.

Regarding timelines, what ADA is saying is 3 to 6 months, the contract should get placed. We have to go by what they say.

I have no inside information to say anything different. Then the program is on, whoever gets the contract.

The program is on. The details of the program, RFP details is not yet published.

I'm not liberated to say anything at the present moment. Even if they're published, we'll be signing NDA, I won't be able to talk about it.

Thank you for the opportunity, sir, and congratulations on a great set of performance. Sir, I wanted to continue on the BrahMos seeker bit.

Every year, what we see on the internet is that we make about 100-odd missiles, and we're increasing capacity to 150. Assuming that we're increasing capacity, the seeker requirement would then also be 150.

What is our sense of the share of wallet that we get? Do we think we can get all of the 150 as we get the production orders, or we think it'll be half of it?

Hence, what is the kind of capacity you're currently working with that you want to add? Thank you.

First is, I don't have knowledge on how many of the missiles actually get fitted with the seekers. That's based on the contract from customer to BrahMos, and we are not privy to such information.

What I can say is the enquiry comes to us, what the order comes to us, we can only talk about it. Hearsay on the scale, what I hear is that the requirements are large because it's a successful missile, and they are planning to buy more of them, and some more are being exported also.

We need to go with whatever they say, and I have to go with what RFP I get and contract I get. I can't talk about work share.

You can ask somebody else because I don't have any idea really what it is. We will be able to tell you what we get orders.

What we hear is that the requirements are large. That's the present extent of my knowledge.

Thank you all. Thank you for tuning in for the Q3 9-month presentation call with investors.

As we have been saying during the question-answer session also, we're very committed to building scale in this business. Requirements are large.

The government is giving us a lot of opportunities. Largely, India is still importing very major sensors and technology products and systems.

We want to address that portion of the business and see what is it we can do in India, and how the IP can be more, and the Indian content can be more. Government also says that large portion of this should be Indian-made.

That also enthuses us to see that we invest more. Obviously, investment and development happen when the contracts happen, and business happens.

I'm happy to say that the business, whatever we designed in the last couple of years, getting into the end stage where we expect some very large contracts to happen in the next 1 to 2 years' time, which can rapidly scale up the company's business. Once we do that, I think we'll be in a different scale.

We probably address larger markets. As we going ahead, we're also looking at not just India, like I said, we're also looking at export.

Here we give a 3- to 5-year kind of horizon to see how to scale that business model and go. The third portion is also building Indian ecosystem with large defense contractors in India.

See whether partnerships can be forged. It's not easy, but we will make an attempt.

We've started with Bharat Forge. Let us see what we get out of this.

These are all, of course, long-term. It's not going to be short-term.

Any development in defense is a long-term program, but this will put the foundation to scale up later. As far as the short and medium term, I think the order book's scaling up very nicely.

It will scale up the order book in the coming year also, which will also give us that whatever projection we follow multiple X the turnover which we did last year or this year, we should be able to start doing in the next 3 years' time. This we will work on, and look at other opportunity, how to scale the business to be a large corporate in the next 5 to 7 years.

That is our ambition and vision, and this all will come out of internally developed, and also with partnerships. A lot of IP being done within Data Patterns.

We are building the skill sets in terms of people capabilities. We're also building infrastructure and investing in infrastructure, see that we address these opportunities as and when it happens, and be ahead of the game as far as possible.

We're trying to get into also is revenue model on a quarterly basis, a repeat revenue model, to reduce the up and down of project model. We're trying to see what is the best way to do this, looking at various opportunities and strategize, see what is it we need to decide on.

It's a bit tougher, but we want to go in that direction also to see that smooth in cash flows and things like that, and get an order book. We are attempting to do a whole lot of things.

We're happy to say that these are all planning out the way we want. There has been some delays, but anyway, that's part of the problem with government-driven orders.

We know there's going to be, we need to have bouquet of products to see that the delays are not affecting our scaling ambitions and revenue growth as we plan to be. We want to be an IP-driven business, as I keep telling you, not to be a top-line business.

We continue to strive to be an IP-driven business, and looking at other opportunities like anti-drone systems. We have a product now designed for anti-drone, both passive as well as active anti-drone, as well as jamming.

We built some products out of whatever existing products, trying to see whether we reposition these products, re-application this can be large. We're doing a lot of very good things.

I hope all this what we've done finally goes into contract. I believe there's a need in the market.

I think we are in the right direction. We're very, very enthusiastic and committed to what we're doing, and excited with the opportunities is happening.

That's I think we're going ahead. We will build scale as we go along, what we think presently.

Anyway, thank you very much for listening in, asking the questions. If there is anything further, please write to Go India, and we will respond to your questions one on one.

Thank you very much again.