Defence Stocks in Focus: Mixed Movement in HAL, GRSE, Solar Industries, Data Patterns, and DCX Systems

Market Performance

On Friday, defence-related stocks witnessed mixed reactions in early trade following the quarterly earnings of Hindustan Aeronautics Ltd., Garden Reach Shipbuilders Ltd., Solar Industries Ltd., Data Patterns Ltd., and DCX Systems Ltd.

Key observations from the market:

• Data Patterns opened nearly 7% lower.
• DCX Systems traded 1.5% down.
• Solar Industries fell 1.4% despite early gains.
• HAL and Garden Reach were largely flat in early trading.
• Over the past one month, these five defence stocks have seen a downward trend ranging from 8% to 14%.

Earnings Impact: Data Patterns, DCX Systems, and Solar Industries

Data Patterns Ltd.

• Revenue dropped 5% YoY, marking a deviation from estimated growth.
• EBITDA declined 14% compared to the previous year.
• EBITDA margin shrank 340 bps, standing at 32.33%, down from 35.73%.
• Order book increased 11.5% YoY, reaching ₹814 crore.
• The stock has dropped nearly 14% in the last month.

DCX Systems Ltd.

• Revenue grew by a strong 61% YoY in the June quarter.
• Net profit increased 38% YoY.
• EBIT margin fell by 200 bps, now at 4.87%, compared to 6.84% in the same quarter last year.
• The drop was partly due to ₹11 crore in R&D expenses by a wholly-owned subsidiary.
• Order book stood at ₹2,697 crore as of the June quarter-end.
• The stock is down 8% over the past one month.

Solar Industries Ltd.

• Revenue rose 28% YoY.
• EBITDA grew 19% YoY.
• EBITDA margin narrowed by nearly 200 bps, now at 24.83%, compared to 26.67% last year.
• Order book stood at a significant ₹16,800 crore.
• Shares are down almost 10% in the last one month and slid 1.4% in early Friday trading.

Upcoming Reports: HAL and Garden Reach Shipbuilders

While HAL (Hindustan Aeronautics Ltd.) and Garden Reach Shipbuilders Ltd. are expected to report their earnings later in the day, their stocks were largely unchanged in the morning session.

• Over the past month, HAL has dropped 9%, while Garden Reach has declined 10%.
• Both counters showed limited movement in early trade on Friday.

Company Details at a Glance

Summary of the Article

Defence stocks including Hindustan Aeronautics Ltd., Garden Reach Shipbuilders Ltd., Solar Industries Ltd., Data Patterns Ltd., and DCX Systems Ltd. experienced notable movements in Friday’s session following quarterly results. While Data Patterns and Solar Industries reported pressure on margins, DCX Systems showcased strong revenue growth but faced profitability challenges due to R&D costs. HAL and GRSE were subdued ahead of earnings. Across the board, most stocks in this segment have recorded a downward trend over the past month.