Fractal Analytics Limited showcased strong financial performance in its first earnings call as a public company, reporting impressive growth across key metrics for the third quarter ended December 31, 2025. The AI-focused enterprise solutions provider demonstrated resilience and expansion in its core business segments while maintaining industry-leading profitability margins.

Financial Performance Highlights

The company delivered robust revenue growth of 21% year-over-year, reaching INR 854 crore in Q3 FY26. On a constant currency basis, growth stood at 14% year-over-year and 5% quarter-over-quarter. For the nine-month period, the company achieved 20% year-over-year growth and 15% on constant currency terms.

The company's gross margin expanded by 17 basis points year-over-year to 47.2%, benefiting from a shift toward output-based contracts, price increases, and productivity improvements. This expansion was partially offset by annual merit increases and currency fluctuations.

Segment-Wise Performance Analysis

Fractal Analytics demonstrated strong performance across multiple industry verticals, with healthcare and life sciences leading the growth trajectory. The healthcare segment's exceptional 78% year-over-year growth was attributed to strategic investments in building specialized capabilities for serving clients in this sector.

Geographically, the Americas and Europe both recorded 26% year-over-year growth, while APAC experienced a 6% decline due to client-specific issues. The company's focus on Must Win Clients (MWCs) - enterprises with over USD 10 billion revenue, USD 20 billion market cap, or 30 million customers - continued to show positive momentum with 127 MWCs as of December 31, 2025, up from 113 in March 2025.

Client Expansion and Revenue Quality

The company's revenue growth was primarily driven by existing client expansion, which contributed 14 percentage points to the overall 21% growth. New client additions contributed 8 percentage points, while client churn remained minimal at 0.5%. The Net Revenue Retention rate of 114% for Q3 and 115% for the nine-month period demonstrates strong client relationships and expanding engagements.

Fractal Analytics scaled its client base significantly, with greater than USD 1 million clients increasing from 53 to 58, and clients contributing more than USD 20 million in revenues growing from five to six during the comparable periods. Revenue per billable headcount increased to USD 85,000, representing a 6% increase in rupee terms and 2% in dollar terms on a trailing 12-month basis.

Profitability and Operational Efficiency

The company achieved a significant milestone by crossing the INR 100 crore mark in quarterly profit after tax, representing 11.7% of revenue. Despite increased losses from associate company Qure.ai and lower other income due to forex losses, the underlying business performance remained strong.

The company's Fractal Alpha segment, comprising Asper and Analytics Vidhya, showed remarkable improvement with 51% year-over-year growth in the nine-month period. Gross margins for this segment expanded by 276 basis points, while losses reduced by 51% compared to the previous year.

Research and Development Investments

Fractal Analytics continued its commitment to AI research and development, investing approximately 4.1% of revenue in R&D activities. The company launched several innovative AI products, including Vaidya 2.0, a healthcare-focused foundation model that achieved a 50+ score on OpenAI HealthBench, and PiEvolve, an agentic engine for autonomous machine learning that ranks among the world's top performing agents on OpenAI's MLE bench.

Strategic Outlook and Market Position

The company's leadership expressed confidence in maintaining historical growth rates of approximately 30% annually while expanding gross margins and profitability. With 127 Must Win Clients and a strong pipeline of AI-driven solutions, Fractal Analytics is well-positioned to capitalize on the growing enterprise AI adoption. The company's focus on output-based and outcome-based engagement models is expected to drive higher margins while delivering superior value to clients.

Fractal Industries Limited has announced strong financial performance for the half year ended September 30, 2025, alongside key corporate governance appointments and subsidiary formation plans. The Mumbai-based garment manufacturing and supply chain services company reported these developments following its board meeting held on March 10, 2026, which commenced at 3:00 PM and concluded at 4:15 PM.

Financial Performance Highlights

The company delivered robust financial results for the half year ended September 30, 2025, with the board approving audited financial results under Regulation 33 of SEBI LODR Regulations. Key performance metrics demonstrate significant growth across major financial indicators.

The company's profit before tax increased to ₹829.73 lakhs compared to ₹404.81 lakhs in the corresponding period last year. Total expenses were managed at ₹3,896.13 lakhs, with cost of materials consumed being the largest component at ₹2,387.38 lakhs.

Subsidiary Formation for CSR Activities

The board approved the incorporation of Bishwanath Kashinath Foundation as a wholly owned subsidiary dedicated to Corporate Social Responsibility activities. The foundation will focus on charitable purposes without profit motive and requires Ministry of Corporate Affairs approval for incorporation.

The foundation's main objectives include promoting education, healthcare, environmental protection, social welfare, skill development, rural development, and community development activities. It will also focus on eradicating hunger and poverty, promoting preventive healthcare, ensuring environmental sustainability, and supporting disaster relief efforts.

Auditor Appointments

The company strengthened its governance framework by appointing new auditors for the financial year 2025-26, as approved during the board meeting.

Secretarial Auditor: M/s Parth Nair and Associates, Company Secretaries, based in Ahmedabad, has been appointed as the Secretarial Auditor. The firm is a legal consultancy firm registered with the Institute of Company Secretaries of India, specializing in corporate laws, securities laws, legal due diligence, legal drafting, and intellectual property laws. The firm is located at 201, Giriraj Complex, Opp. Bank of Baroda, Nr. Sardar Patel Statue Circle, Naranpura, Ahmedabad- 380013, Gujarat.

Internal Auditor: M/s N S Rathi & Associates, Chartered Accountants, Mumbai, has been appointed as Internal Auditor. The peer-reviewed firm is dedicated to delivering high-quality financial audit and regulatory solutions, with core expertise spanning comprehensive audits including tax, statutory, internal, bank branch and stock audits, along with strategic advisory and RERA compliance support. The firm is located at Office No 502, Runwal R Square, Besides Runwal Anthurium, LBS Marg, Mulund West, Mumbai 400080.

Balance Sheet Strength

As of September 30, 2025, the company maintained a strong balance sheet with total assets of ₹6,203.78 lakhs compared to ₹5,141.37 lakhs as of March 31, 2025. Share capital increased significantly to ₹558.03 lakhs from ₹50.00 lakhs, reflecting the impact of the company's IPO completed in February 2025.

The company operates in garment design, sourcing, manufacturing, and provides end-to-end warehousing and supply chain services to e-commerce platforms. The board meeting outcome was communicated to BSE Limited under Scrip ID 544707, with Managing Director Pankaj Bishwanath Agrawal (DIN: 02709947) signing the official communication.