Buy Aerospace & Defense Midcap Stock, Gained 99.76% In 1 Yr, Shares Can Surge 19%: ICICI Direct

ICICI Direct in its recent equity research report has placed a "Buy" on Data Patterns (India) Ltd. (DPIL). It has estimated a target price of Rs 1,555/share. If you buy the stock at the current market price it can fetch a decent return of up to 19%. It is a midcap stock operating in the Aerospace & Defense industry. The stock has a market capitalisation of Rs 6,792.22 crore.

Stock Outlook - CMP, Returns, and 52-Week Low/High

The stock DPIL last traded at Rs 1,309.05/share. It hit the 52 week high on 6 February 2022 at Rs 1,540/share, and 52 low on 20 June 2022 at Rs 607.75/share, respectively. It was listed on 24 December 2021.

It has gained 1.3% in 1 month and declined 7.97% in 3 months, respectively. It gained 3.75% in 1 year and 99.76% in 1 year. It gained 73.38% since its listing.

Fund raising of Rs 500 crore through QIP

According to ICICI Direct, The board has approved the allotment of 40.97 lakh shares through QIP at an issue price of Rs 1220.31 per share (FV at 2), aggregating to Rs 500 crore. Issue price is at a discount of 5% on the floor price and 7.1% discount to Monday's closing. Promoter holding post the issue will be diluted to 42.4% from 45.8% with EPS dilution at 7.3%. Net proceeds to be utilised mainly towards funding working capital requirements, investment in product development, debt repayment & capex.

Buy stock with a target price of Rs 1,555 apiece

According to ICICI Direct, DPIL is well placed to deliver revenue, PAT CAGR of 29.3%, 28.5%, respectively, over FY22-25E. "We believe that fund raising for working capital and product development would benefit the company in faster execution of existing contracts and in bidding for more contracts We upgrade the stock from HOLD to BUY. We value Data Patterns at Rs 1555 i.e. 42x on FY25E EPS," the brokerage has said.

About the Stock

Data Patterns (India) (DPIL) is a vertically integrated defence and aerospace electronics solutions provider catering to the indigenously developed defence products industry. The company delivered revenue, PAT CAGR of 18.9%, 40.7%, respectively, in FY19-22. FY22 revenues increased 39% YoY with EBITDA margin at 45.4%. FY22 PAT increased 69% YoY to Rs 94 crore.

Disclaimer

The stock has been picked from the brokerage report of ICICI Direct. Greynium Information Technologies, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.