Are Data Patterns (India) Ltd latest results good or bad?

Data Patterns (India) Ltd's latest financial results for the quarter ended December 2025 reflect a complex operational landscape characterized by significant revenue fluctuations typical of the aerospace and defence sector. The company reported net sales of ₹173.13 crores, which represents a notable sequential decline of 43.69% from the previous quarter, although it shows a substantial year-on-year growth of 47.92% compared to ₹117.04 crores in the same quarter last year. This divergence highlights the inherent volatility in revenue recognition tied to project milestones and delivery schedules. Despite the sequential revenue decline, the company achieved a net profit of ₹58.30 crores, which is an 18.52% increase from the prior quarter and a 30.53% increase year-on-year. This performance indicates the company's ability to maintain profitability even amidst revenue fluctuations. The operating margin, excluding other income, stood at 46.55%, matching the previous year's performance and indicating strong operational efficiency and pricing power. The nine-month performance for FY26 shows a revenue generation of ₹579.92 crores and a net profit of ₹132.99 crores, reflecting year-on-year growth of 86.78% and 23.66%, respectively. This broader perspective suggests that the company is effectively capitalizing on its expanding order book and execution capabilities. However, the company's return on equity (ROE) for the latest fiscal year was reported at 15.48%, which, while an improvement from its historical average, remains below industry benchmarks. This indicates potential areas for enhancement in capital efficiency and shareholder value creation. Overall, Data Patterns (India) Ltd's financial results illustrate a company navigating the challenges of a project-based revenue model with commendable profitability metrics, although it faces ongoing scrutiny regarding its valuation and operational efficiency. The company saw an adjustment in its evaluation, reflecting the complexities of its financial performance amidst the sector's dynamics.