Data Patterns (India) Limited

“Data Patterns is a rare Indian defence technology compounder — vertically integrated, IP-rich, moat-widening, and founder-led with a structural multi-decade tailwind from India's indigenisation mandate. Revenue has compounded ~27% annually, EBITDA margins exceed 40%, and the balance sheet is effectively debt-free. These qualities are not in dispute. What is in dispute is the price: at 99x trailing and 60x forward earnings, all near-to-medium-term growth is already capitalised, leaving a probability-weighted 5-year return that is marginally negative and a 10-year return of roughly 2–3x. The business earns above-average returns at below-average risk of permanent impairment; the stock does not currently offer the same proposition. A 35–45% price correction — entirely plausible given defence-sector re-rating cycles — would create a genuinely compelling entry at 35–40x forward earnings.”