Shares Of This Defence Company Hit 52-Week High Today, Analyst Sees Further Upside

Data Patterns shares have climbed up 6% this week, and ICICI Securities analysts see the stock going up another 9%.

The Data Patterns Analyst: The Chirag Shah-led analyst team at ICICI Securities maintained the ‘buy’ rating for the stock with a price target of ₹1,670- around 12% upside from the stock’s last closing price of ₹1,483.40.

The Data Patterns Thesis: The analysts said that defence and aerospace electronics solutions provider is one of the key beneficiaries in the private defence industry from the recent orders received by Bharat Electronics.

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The company is expected to contribute to the fulfillment of many orders. In its research note, ICICI Securities said that the company is expected to contribute to “sub-systems or electronic components used in DR118 Radar Warning Receivers (RWR), Arudhra radar, Himshakti Electronic Warfare (EW), EW suite equipment for upgrade program of Mi-17 medium lift helicopters, weapon locating radars and fire control systems.”

Another order in which the analysts see the company playing a key role, is the defence contract bagged by BrahMos Aerospace Pvt Ltd (BAPL) for procurement of Next Generation Maritime Mobile Coastal Batteries (Long range) {NGMMCB (LR)} and BrahMos Missiles at an approximate cost of over ₹1,700 crore. DPIL has been the sole supplier of key electronic sub-systems for the BrahMos missile programme for the past many years.

The brokerage however noted that the stock is currently trading at a rich valuation that could limit the potential upside.

Price Action: Data Patterns share price was up 3.01% to trade at ₹1,528.10 in the early hours of trading on Tuesday.

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