Data Patterns stock buy sell or hold?
In Indian stock market, after bumper
listing of companies like MTAR, Paras defence, Now Data Pattern Company had
made its debuted in Indian stock market from defence sector. Company had received very good response
for its IPO from QIB, NII’s & Retail investors & had subscribed nearly
119.6 times. Many investors had received shares of Data pattern in IPO
allotment but many of people had not received allotment of shares in Data
pattern IPO. Now two most common questions are arising in the mind of the
investors & traders that
1)
Should you hold or sell Data patterns after IPO listing?
2) If you had not received allotment
of shares in Data pattern IPO then should you should buy Data patterns stock after its IPO listing ?
Before reaching to any conclusion on
data pattern stock hold or sell after IPO listing, We have to understand the Positive
& negative point of the Company.
Question:
What
are the positive points about Data Patterns Company?
Answer:
1) Management of the company have
great experience in the field in which they are operating its business. Almost
25 years of experience in defence and aerospace electronics solutions providing
industry. This company has more focus on core products like electronic hardware
design and development, software design and development, environment testing
and verification and engineering services ,product prototype design and
development, functional testing and validation, firmware design and
development, mechanical design and development. Excellent track record &
products will be more in demand especially in the defence sector.
2) There is not much comparison of
their products in the market but still some of the products are getting competition
from big companies like MTAR techno which
is listing in the Indian stock market. But there is no direct comparison of
this company with MTAR Techno because MTAR Company has better valuation &
size of the company.
3) Another best thing goes in favour
of Data Pattern Company that is there is not legal case against this company.
It means company management is following all rules of corporate governance.
4) Company is profit making. If we
will check the past financial track record of the company then from last 10
years company is making good profit. It is a very good sign for any company shareholders.
5) Company had come up with Average valuations
& Funds raised from IPO will be used to meet working capital requirements.
It will help to save interest cost.
6) Company has its own land of 5.8 acres
in Chennai on which manufacturing facilities are installed. There is no liability
on the company for paying any rent of land. It will help the company to
increase more reserves & it will also save interest cost.
7) As per the company management commentary,
company has also plan to acquire an additional 2.81 acres of adjacent land for future
expansion of the company.
8) Company will get more benefits of
Indian government “Make in India” scheme because most of the products of the company
have been manufacturing in India.
9) Company will repay its debt by
using some portion of funds raised from Company IPO.
10) In FY21, Company had reported
highest EBIDTA margins, Returns on
equity, ROEC as compared with other Indian defence companies of India.
Questions:
What
are the negative points of Data Patterns Company?
Answer:
As we had discussed some reasonable
positive point of the company but there are not much negative points of this
company but still after our research we had find one big negative about this
company which is as follow:
1) Company was established in 1985
& Company is operating it in good & demanding niche of the business but
still Company size is too small. Total revenues of the company is 225cr &
Market cap of the company is nearly 3000cr. This question will defiantly come
into the mind of big investors once the company will list into the Indian stock
market. If Company has good track record & very good management then why
Size of the company could not increase in the last 25 years. Even after more
demand of its products in the defence sector.
2) If the Size of the company will
remain same then such kind of the companies will not come on the radar of the
mutual fund companies. It will take more
years to increase its company market cap.
Financial performance of Data Pattern
is really very good. As we have already discussed above that company is making
profit from last ten years. Today we will discuss last 3 financial year’s
performance of the company in front of Turnover & Net profit.
1) In FY19 Company had made net profit
of 7.7cr against the total turnover of nearly 132.5 cr.
2) If we will talk about the FY 20,
company had reported net profit of 21cr against Total turnover of nearly 160cr.
3) In FY21, there is a big jump in the
Net profit of the company & Data pattern had recorded 55.6cr profit in
FY21. It is a great performance by the company.
4) As per company management, in the
first half of FY 22 ended Sept 2021, Company had reported net profit of 23.2cr
against 97.1cr total turnover.
5) Company had reported Earnings per
share of AVG. 7.7 per share in the last 3 financial years & Demanding P/E
of 65.3 on the basis of FY21 earnings.
Question:
Which
Indian stock market listed companies are
competitor of data pattern company ?
Answer:
As per the company official documents,
DPIL has competition from companies like MTAR Technology , Bharat Electronics , Paras
Defence, Astra Microwave & Centum Electronics. If we will calculate the
valuations of its peer companies those are listed on Indian stock market then P/E
of 134.8, 22.4, 189.04, 52.1 & 188.6 respectively. But we personally feel
that DPIL has small size of company so it is not appropriate to establish any comparison
with big companies.
Questions:
Can Data Patterns Company offer dividend in the
future & What is the dividend track record of Data Patterns Company?
Answer:
If we will check the past track of the
company then in the last 3 years Data patterns had paid dividend of 20%. It
means that company has good dividend track record & Shareholders of the
company may expect dividend in the future. But it all will depend on the
company future financial performance.
Questions:
Should
you Buy or sell Data patterns, DPIL after IPO listing?
Answer:
Data patterns is a very strong company
& having very good future outlook. Financial performance of the company is
really very good. We maintain “Buy” Rating
on Data pattern stock for long term investment point of view with the price
target of 800rs+ in 1 to 2 years. New investors & traders may buy Data
patterns stock, DPIL even after its IPO listing. But it is better accumulating
DPIL stock in small sets.
Questions:
What
is the best strategy to trade in Data patterns, DPIL stock after IPO listing?
Answer:
Investors & traders can follow two
strategies after IPO listing of Date pattern, DPIL Stock
1) Try to lock you profit on higher
levels i.e 10 to % 20% if you get listing gains if you get above 10% to 20% Listing
gains then take it as a lottery & book profit & wait for some profit
booking in the stock.
2) Hold the stock for long term point
of view with the strict stop loss of 15% above the IPO price 585rs. Mind it
Indian stock market is trading at very higher valuations. If Indian stock
market will go down then IPO stocks will
correct more than market overall correction. Therefore keep strict stop loss as
suggested & try to lock your profit.
Question:
Can
you buy DPIL Stock for long term?
Answer:
There is nothing bad with the company & Valuations with IPO price of 585rs looks better. If you want to invest in Data patterns stock for long term then yes you can add this stock into your portfolio.
Recommendation on Data Patterns, DPIL:
Buy DPIL stock for long term & traders should book profit on every rise of stock or trail the stoploss as suggested above.
Please do not enter any spam link in the comment box.