Defence stock: Data Patterns shares gain 7%, rise for third session; here's the trigger

Shares of Data Patterns India gained 7% in early deals on Friday after global brokerage Goldman Sachs projected a 38% upside for the defence stock from its previous close. The brokerage assigned a price target of Rs 3,640 compared to the previous close of Rs 2629.55. 

Data Patterns stock rose 6.84% today to Rs 2809.60 on BSE. Market cap of the firm climbed to Rs 15,552 crore. 

The stock has risen for the third straight session today. 

Data Patterns shares have gained 22% in a year and risen 11.49% since the beginning of this year.

The stock has a one-year beta of 1.4, indicating average volatility during the period.

In terms of technicals, the relative strength index (RSI) of Data Patterns stands at 48.1, signaling neither the stock is overbought nor oversold. Data Patterns stock is trading higher than the 5 day, 10 day, 20-day, 100-day and 200-day moving averages.

Goldman Sachs expects an increase in domestic defence Total Addressable Market (TAM), by more than six-fold, in comparison to financial year 2025 over the next 20 years to over Rs 10 lakh crore. It is also positive on the scope for indigenization at the bottom of the tech pyramid.

The brokerage sees higher defence exports, with the government targeting Rs 50,000 crore worth of exports by financial year 2029, compared to Rs 23,600 crore last year.

Data Patterns (India) Limited is an India-based vertically integrated defence and aerospace electronics solutions provider catering to the indigenously developed defence products industry. Its portfolio includes COTS Boards, ATE and Test systems, Space Systems, and Radio Frequency and Microwave. It designs COTS module products that are used in rugged applications and automatic test equipment platforms.