Fractal Analytics Q1 net profit jumps 92% to Rs 72.3 crore

AI company Fractal Analytics reported a 92% year-on-year jump in first-quarter profit to Rs 72.3 crore, driven by strong demand for enterprise AI services and healthy margin expansion.

The company posted revenue from operations of Rs 912.5 crore in the June quarter, up 20% year-on-year. In Q4, Fractal's revenue stood at Rs 886.3 crore and net profit at Rs 115.8 crore.

Earnings before interest, tax, depreciation and amortization (Ebitda) margin expanded to 16% in the quarter, up from 12.5% in the year before.


“Revenue growth was led by the company’s Healthcare and Life Sciences (HLS) industry, which clocked 69% growth year-on-year,” the company said in a statement.

Banking, Financial Services and Insurance (BFSI) grew 36%, while Fractal’s largest industry, Consumer Packaged Goods and Retail (CPGR), grew 19% year-on-year. On the other hand, Tech, Media and Telecom vertical (TMT) declined 22% YoY.

Geographically, Fractal’s largest market, Americas, which constitutes nearly 70% of its business, grew 24% in the quarter. Europe grew 25%, while Asia-Pacific and other regions declined 2%.

“Enterprises are putting real transformation budgets behind AI now, and we're seeing it directly in the size of the deals coming to us. TMT was the drag on our headline growth this quarter. Excluding TMT, our business grew 35% year on year, which is a better read on the underlying demand we're seeing,” Srikanth Velamakanni, group CEO and executive vice chairman, said in a statement.

Fractal also said it now has 58 clients contributing over $1 million in annual revenue in Q1, up from 54 a year earlier, reflecting increased enterprise adoption of AI-led transformation services.

The company’s net revenue retention, a key metric indicating increased spending from existing customers, stood at 117% in Q1.

The company listed on Indian stock exchanges on February 16, with an initial public offering of Rs 2,834 crore. On Thursday, Fractal’s shares were trading at Rs 866 on NSE, about 3% lower than the previous trading session.