DATAPATTNS - Investment Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Investment Rating: 4.2

📊 Fundamental Analysis

Strengths

Zero Debt: A debt-free balance sheet provides financial flexibility and reduces risk.

High ROCE (21%) & ROE (15.2%): Indicates efficient capital utilization and strong profitability.

Strong Quarterly Profit Growth: PAT jumped from ₹44.7 Cr to ₹114 Cr — a 60.4% increase.

EPS of ₹39.6: Solid earnings per share for its price range.

FII & DII Interest: Slight uptick in institutional holdings, especially DII (+0.72%), suggests growing confidence.

Concerns

High P/E (66.4) vs. Industry P/E (68.1): Valuation is stretched, pricing in high growth.

PEG Ratio of 2.09: Indicates overvaluation relative to growth; ideal PEG is <1 for value investors.

Low Dividend Yield (0.31%): Not attractive for income-focused investors.

RSI at 34.1 & MACD Negative: Technically weak, suggesting bearish momentum.

💡 Is It a Good Long-Term Investment?

Yes — but with caution. The company shows strong fundamentals, zero debt, and impressive profit growth. However, the valuation is rich, and technical indicators suggest short-term weakness.

🎯 Ideal Entry Price Zone

Valuation-Based Entry: ₹2,200–₹2,400 This range is closer to the 200 DMA (₹2,475) and offers a better margin of safety.

Aggressive Entry: ₹2,000–₹2,200 If the stock corrects further due to weak technicals, this zone aligns with historical support and offers high upside potential.

🧭 Exit Strategy / Holding Period

If you already hold the stock

Holding Period: Minimum 3–5 years to ride out valuation cycles and benefit from compounding ROE/ROCE.

Exit Strategy

Partial Exit if price crosses ₹3,200–₹3,300 again without earnings support.

Full Exit if fundamentals deteriorate (e.g., ROE drops below 12% or PEG rises above 2.5).

Re-evaluate if RSI crosses 70 or MACD turns sharply positive — could signal overbought conditions.

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