Fractal Analytics reported strong annual growth but faced margin and cash‑flow pressure in Q1 FY27. Consolidated revenue rose to ₹912.5 crore, up 20% year‑on‑year, while net profit nearly doubled to ₹74.2 crore. However, profitability and operating cash flow weakened compared with the previous quarter.
Revenue and profit trends
For the quarter ended June 30, 2026, consolidated operating revenue stood at ₹912.5 crore, a 19.99% increase from Q1 last year and a 2.96% rise versus Q4 FY26. Net profit was ₹74.2 crore, up 97.9% year‑on‑year but down 37.0% quarter‑on‑quarter from ₹117.8 crore in Q4 FY26.
Segment performance
Fractal.ai remained the principal revenue driver, contributing ₹894.2 crore and recording 20.6% annual growth. Healthcare and Life Sciences led growth with 69% YoY expansion. BFSI grew 36% and Consumer Packaged Goods & Retail rose 19%. TMT was the weak spot, with revenue down 22% year‑on‑year; management said excluding TMT, the rest of the business grew roughly 35% YoY.
Geographically, the Americas accounted for 67.4% of revenue and grew 24% annually. Europe contributed 21.4% and rose 25%, while APAC and other regions declined about 2%.
Fractal Alpha, the firm’s independent AI ventures, reported ₹24 crore in revenue (up 19.6% YoY) but remained loss‑making with an adjusted EBITDA margin of minus 58.3%.
Margins, costs and cash flow
Operating margin excluding other income fell to 15.66%, down 467 basis points sequentially. Adjusted EBITDA margin was 16.8%, down 530 basis points from Q4 FY26 though higher than Q1 last year.
Employee costs rose to ₹643.1 crore, an increase of 9.39% quarter‑on‑quarter and about 70.5% of revenue. The company reported negative operating cash flow of approximately ₹103 crore in Q1, after positive cash flow of around ₹301 crore in Q4 FY26. Fractal’s share of losses from associate Qure.ai was ₹23.4 crore, which weighed on consolidated profit.
Investor reaction and company position
Investors reacted to softer quarterly metrics: the stock fell 5.85% after results and trades roughly 27.5% below its 52‑week high. Key operational metrics remained healthy — net revenue retention was 117% and Net Promoter Score stood at 77. The firm serves 112 “Must Win” clients that generate over 85% of revenue, with the top 10 customers contributing more than half.
Fractal had 6,029 employees at quarter end and reported attrition of 15.6%. Group CEO Srikanth Velamakanni said the company will continue investing in AI platforms and R&D, which is about 6.7% of revenue. The results underline strong demand in healthcare and financial services, while highlighting the need to stabilise margins and cash flow in coming quarters.
