Why did Data Patterns shares fall over 9% on Friday, May 15?

Shares of Data Patterns fell sharply over 9% during Friday’s session despite the company reporting record annual order inflows and strong FY26 profit growth, as investors appeared concerned over weak Q4 revenue performance and valuation pressure.

As of 9:30 AM IST on Friday, May 15, Data Patterns shares were trading at Rs 3,641.20, down 9.21% or Rs 369.30 from the previous close of Rs 4,010.50. The stock touched an intraday low of Rs 3,618.40 on NSE.

The company reported Q4 FY26 revenue from operations of Rs 396 crore, down 13% year on year, reflecting delays and timing-related execution issues in defence project deliveries. While net profit rose 21% YoY to Rs 138 crore from Rs 114 crore, the market reaction suggests investors focused more on the decline in topline growth during the quarter.

The sharp correction also comes after a strong rally in defence stocks over recent months, with Data Patterns trading at elevated valuations. The stock’s P/E ratio stood above 83, according to market data, indicating high growth expectations already priced into the stock.

For the full financial year FY26, Data Patterns posted a much stronger performance. Revenue rose 31% to Rs 925 crore, while net profit increased 22% to Rs 271 crore. The company also recorded its highest-ever annual order inflow at Rs 1,121 crore, with the closing order book standing at Rs 926 crore.

Management guided for 20–25% revenue growth and EBITDA margins of 35–40% in FY27. The board also recommended a final dividend of Rs 10 per share for FY26.

Despite the positive long term guidance, the market appears to have reacted negatively to the quarterly revenue slowdown, execution lumpiness, and rich valuations in the near term.