DATAPATTNS - Investment Analysis: Buy Signal or Bull Trap?
Back to ListInvestment Rating: 4.0
| Stock Code | DATAPATTNS | Market Cap | 14,734 Cr. | Current Price | 2,630 ₹ | High / Low | 3,269 ₹ |
| Stock P/E | 63.1 | Book Value | 275 ₹ | Dividend Yield | 0.30 % | ROCE | 21.0 % |
| ROE | 15.2 % | Face Value | 2.00 ₹ | DMA 50 | 2,599 ₹ | DMA 200 | 2,611 ₹ |
| Chg in FII Hold | 0.14 % | Chg in DII Hold | 0.48 % | PAT Qtr | 49.2 Cr. | PAT Prev Qtr | 25.5 Cr. |
| RSI | 53.4 | MACD | -14.9 | Volume | 6,45,323 | Avg Vol 1Wk | 11,86,708 |
| Low price | 1,350 ₹ | High price | 3,269 ₹ | PEG Ratio | 1.99 | Debt to equity | 0.00 |
| 52w Index | 66.7 % | Qtr Profit Var | 62.4 % | EPS | 41.7 ₹ | Industry PE | 63.1 |
📊 Analysis: Data Patterns (DATAPATTNS) shows strong fundamentals with ROE at 15.2% and ROCE at 21.0%, reflecting efficient capital usage. Debt-to-equity is 0.00, ensuring a debt-free balance sheet. EPS of 41.7 ₹ and quarterly PAT growth (49.2 Cr. vs 25.5 Cr., +62.4%) highlight earnings strength. Dividend yield is modest at 0.30%, offering limited income support. Current P/E of 63.1 is in line with industry average (63.1), suggesting fair valuation. PEG ratio of 1.99 indicates slightly stretched valuations relative to growth. Technicals show neutral momentum with RSI at 53.4 and MACD negative (-14.9).
💰 Ideal Entry Zone: Considering DMA levels (50 DMA at 2,599 ₹, 200 DMA at 2,611 ₹) and support near 2,350–2,400 ₹, the ideal long-term entry zone is 2,350–2,450 ₹. Current price (2,630 ₹) is slightly above comfort zone, so staggered entry is advisable.
📈 Exit / Holding Strategy: For existing holders, Data Patterns is a good candidate for long-term compounding (3–5 years) given strong ROE/ROCE and debt-free status. Exit strategy: consider partial profit booking near 3,200–3,250 ₹ resistance zone. Long-term investors can continue holding as long as ROE remains above 15% and earnings growth sustains.
Positive
- ✅ Strong ROE (15.2%) and ROCE (21.0%).
- ✅ Debt-free balance sheet (Debt-to-equity 0.00).
- ✅ EPS of 41.7 ₹ supports earnings visibility.
- ✅ Quarterly PAT growth (+62.4%) shows strong momentum.
- ✅ Institutional support with FII (+0.14%) and DII (+0.48%) increases.
Limitation
- ⚠️ High P/E (63.1) compared to broader market, though in line with industry.
- ⚠️ PEG ratio of 1.99 suggests valuations are stretched relative to growth.
- ⚠️ Dividend yield (0.30%) is low, limiting income support.
Company Negative News
- 📉 MACD negative (-14.9), indicating weak short-term momentum.
- 📉 Trading volumes lower than average (6.45 lakh vs 11.86 lakh weekly avg).
Company Positive News
- 📈 PAT improved significantly from 25.5 Cr. to 49.2 Cr.
- 📈 EPS remains strong at 41.7 ₹.
- 📈 Institutional investors (FII/DII) increased stake.
Industry
- 🏦 Industry P/E at 63.1 highlights Data Patterns trades in line with peers.
- 🏦 Defence and aerospace electronics sector has strong long-term demand potential driven by government and private investments.
Conclusion
🔎 Data Patterns is a fundamentally strong, debt-free company with efficient capital usage and strong earnings growth. While valuations are slightly stretched, its long-term compounding potential makes it a good candidate for investors seeking growth. Ideal entry zone is 2,350–2,450 ₹, with a holding horizon of 3–5 years. Exit near 3,200–3,250 ₹ if valuations become excessive without earnings catch-up.