Inspection delays hitting deliveries: Data Patterns

Data Patterns Limited, an electronic parts manufacturer for the military, revealed that the government's emphasis on developing local capabilities is generating substantial revenue opportunities. However, the lag between place orders and converting them into revenue is increasing due to a shortage of inspection staff delaying shipments.

Chairman and Managing Director S Rangarajan noted that while the government's push for indigenous content is creating significant opportunities, delays in inspecting finished products are hindering deliveries. The company had a Rs 2,654 crore order book as of June 30, with Rs 920 crore in firm orders and Rs 1,726 crore under negotiation.

Rangarajan emphasized that converting pending business into firm contracts and completing deliveries will be vital to achieving growth targets. The defense ministry has been striving to lessen the armed forces' reliance on imported goods, aiming for 70% self-sufficiency by 2030. Data Patterns aims to secure Rs 2,000 crore in new orders this year and is reportedly bidding for a Rs 1,300 crore contract from Hindustan Aeronautics Ltd (HAL).

Delays in shipments caused by inspection teams failing to arrive on time impact when products can be delivered and revenue is recognized. Some major projects faced a delay of over one and a half years, followed by an additional six-month extension, with the customer seeking a two-month extension to the company's offer.