Fractal Analytics Limited reported a 20% year-on-year increase in consolidated operating revenue to ₹9,125 million and a 92% surge in net income to ₹723 million for the quarter ended June 30, 2026. The strong performance was driven by robust growth in the Healthcare and Life Sciences (HLS) and Banking, Financial Services and Insurance (BFSI) segments, which offset a 22% decline in the Technology, Media and Telecommunications (TMT) sector. Adjusted EBITDA margin expanded by 189 basis points (bps) year-on-year to 17%, reflecting improved operational efficiency. Cash flow from operations rose 20% year-on-year to ₹1,030 million, supported by a strong balance sheet with zero long-term debt.

The results were approved by the Board of Directors on July 23, 2026, and subjected to a Limited Review by statutory auditors B S R & Co. LLP. The company also released its investor presentation for the quarter, highlighting an R&D investment of 6.7% of revenue. On a standalone basis, revenue from operations stood at ₹5,060 million, up from ₹4,217 million in the corresponding quarter of the previous year. Standalone profit after tax rose to ₹753 million from ₹406 million in Q1 FY26.

Segment Performance and Growth Drivers

Revenue growth was led by the HLS industry, which recorded 69% year-on-year growth, solidifying its position as the second-largest industry in the company's portfolio. The BFSI segment also performed strongly with 36% growth. Consumer Packaged Goods and Retail (CPGR), Fractal's largest industry, grew by 19%. In contrast, the TMT segment declined by 22%, acting as a drag on headline growth. Excluding TMT, the business grew 35% year-on-year, indicating underlying demand strength. Geographically, Americas contributed 67.4% of revenue, growing 24% year-on-year, while Europe grew 25%.

Margin Expansion and Client Metrics

Fractal reported improved profit margins across all levels. Gross margin increased by 29 bps to 46%. Adjusted EBITDA grew at 35% year-on-year. The company’s focus on deepening customer relationships resulted in a Net Revenue Retention of 117% in Q1, indicating that clients collectively increased their spending. The Net Promoter Score (NPS) stood at 77 during the period, up 4 points year-on-year. Revenue per Billable FTE rose 3% year-on-year to USD 83K (₹7.5 million).

Srikanth Velamakanni, Group CEO and Executive Vice-Chairman, attributed the performance to enterprises allocating real transformation budgets behind AI. "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," he said. He added that data sovereignty priorities and improving open-weight models are driving clients to seek partners who can work across models and infrastructure.

Consolidated Financial Highlights

Total income for the quarter stood at ₹9,321 million, compared to ₹7,749 million in Q1 FY26. Total expenses rose to ₹8,182 million from ₹6,996 million, primarily due to higher employee benefits expense of ₹6,319 million versus ₹5,541 million in the prior-year quarter. Profit before tax was ₹974 million, including an exceptional item of ₹69 million related to the statutory impact of new Labour Codes. The share of loss of an associate amounted to ₹234 million. Excluding the share of loss of associates, Net Income was ₹957 million.

Business Transfer and IPO Proceeds

The Board approved a revision to the Business Transfer Agreement with Analytics Vidhya Educon Private Limited, changing the effective date to May 1, 2026, and revising the aggregate consideration to INR 11.6 crore. As of June 30, 2026, ₹2,702 million of the total IPO proceeds of ₹9,593 million had been utilised, primarily for repaying borrowings of Fractal USA. ₹6,891 million remains unutilised. The company repaid debt of INR 2,887 million in April 2026 as planned, resulting in zero long-term debt. Cash and cash equivalents stood at INR 16,378 million as of June 30, 2026.

Fractal Analytics has accepted the resignation of its Chief Financial Officer & Group Chief Financial Officer, Ashwath Bhat, effective from the close of business hours on July 24, 2026. Bhat resigned from the position of Key Managerial Personnel for personal reasons, as disclosed in a regulatory filing on July 6, 2026. The company is currently in the process of appointing a new CFO and will communicate the details to the stock exchanges in due course.

Bhat will continue to discharge his duties as CFO until his relief date. This includes conducting the earnings call scheduled for the financial results for the quarter ended June 30, 2026, which is set to take place on July 24, 2026. The resignation was submitted pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The disclosure was made by Somya Agarwal, Company Secretary and Compliance Officer of Fractal Analytics Limited. The company confirmed that there are no material reasons associated with the resignation other than the personal reasons cited by Bhat. The filing included the resignation letter and necessary annexures as required under SEBI Master Circular No. HO/49/14/14(7)2025-CFD-POD2/I/3762/2026 dated January 30, 2026.

Fractal Analytics placed on record its appreciation for Bhat's valuable contribution during his tenure. In his resignation letter, Bhat expressed gratitude to the Board of Directors, senior management, and colleagues for the guidance and cooperation extended during his tenure of over five years. He noted that it was a privilege to serve as the CFO and be part of the company's growth journey.