Motilal Oswal has assigned a Neutral rating to Data Patterns (DATAPATT) with a target price of ₹4,000, according to the research report dated July 31, 2026. The target price is based on 50x FY28E EPS valuation methodology. This rating reflects a cautious outlook on the company's near-term performance despite positive long-term growth projections.
Data Patterns reported a muted first quarter performance with EBITDA declining 2% year-on-year, as reported by Motilal Oswal. The decline was attributed to temporary delays in customer approvals, which are expected to normalize in the coming quarters. This temporary setback impacted the company's quarterly profitability despite underlying business fundamentals remaining intact.
The company's performance varied significantly across business segments during Q1FY27. Development segments demonstrated strong growth of 3x year-on-year, indicating robust demand for the company's development services. However, revenue from Production segments declined 6% year-on-year, while Service segments saw a steeper decline of 12% year-on-year, according to the research report. These mixed results highlight the company's diversified business model with varying performance across different service lines.
Motilal Oswal estimates strong growth trajectory for Data Patterns over the medium term. Revenue, EBITDA, and adjusted PAT are projected to grow at a compound annual growth rate of 25%, 23%, and 30% respectively over FY26-28, as reported in the research report. These projections suggest a recovery from the current quarter's challenges and indicate the company's potential to deliver significant value creation in the coming years.
