Why we are bullish on India's junior defence stocks
India's first significant defence export. The missile is the first such armament developed jointly by India and Russia. These missiles are manufactured by Brahmos Aerospace in India.
After this, several other nations in Southeast Asia have expressed interest in buying the missile, including Vietnam and Thailand. Now it is important to understand that electronics form 40% of the defence aircrafts and missiles. So, while the public sector defence giants may grab the limelight, a relatively smaller entity, contributing to Brahmos Fire Control system for both land and airborne missiles, deserves as much attention.
The company's manufacturing facility consists of a 100,000 square feet factory built on 5.75 acres of land in Chennai. The factory has facilities for design, manufacturing, qualification and life cycle support of high reliability electronic systems used in defence and aerospace applications. The company we are referring to is Data Patterns.
The company is not a startup. It has been around for two decades. The name Data Patterns, however, did not ring a bell for most investors looking to ride the defence megatrend in India, even a few years back.
Until the BrahMos story came to the fore. It was in November of 2002 when S Rangarajan, Chairman and Managing Director of Data Patterns, got a call from Sivathanu Pillai's office. The latter, then chief of India's BrahMos missile programme and Chief Controller, R&D, in DRDO (Defence Research and Development Organisation) planned to visit Data Patterns' office on a Sunday.
Pillai had heard about Data Patterns' (DP) technical expertise from the Indian Space Research Organisation (ISRO), to which it was supplying to. He wanted to see for himself. He was especially keen to
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