Fractal’s Net Profit Declines 37% QoQ Even as Enterprise AI Demand Lifts Revenue Past ₹900 Cr

Pure-play AI company Fractal Analytics reported a 97.8% year-on-year jump in net profit for the first quarter of FY27, as rising enterprise spending on AI-led transformation programmes helped revenue cross ₹900 crore and boosted operating margins.

The Mumbai-headquartered company posted consolidated operating revenue of ₹912.5 crore for the quarter ended June 30, up 20% from a year earlier. Net profit rose to ₹74.2 crore, while adjusted EBITDA grew 35% year-on-year. However, on a sequential basis, the profit after tax declined 37%.

Gross margin improved by 29 basis points to 46%, and adjusted EBITDA margin expanded by 189 basis points to 17%.

Commenting on the results, Srikanth Velamakanni, Co-founder, Group CEO and Executive Vice-Chairman of Fractal, said enterprises are increasingly committing larger budgets to AI initiatives.

"Enterprises are putting real transformation budgets behind AI now, and we're seeing it directly in the size of the deals coming to us. Telecom, Media and Technology (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 in a statement.

Healthcare and Life Sciences emerged as the fastest-growing business segment, with revenue rising 69% year-on-year to become Fractal's second-largest vertical. BFSI grew 36%, while Consumer Packaged Goods and Retail (CPGR), the company's largest business, expanded 19%. Revenue from the TMT segment, however, declined 22% during the quarter.

He added, "As data sovereignty becomes a bigger priority for governments and enterprises, and as open-weight models keep improving, clients need a partner who can work across models and infrastructure. We have invested heavily in our people, our research, and our own intellectual property to be that partner.”

Geographically, the Americas remained Fractal's largest market, accounting for 67.4% of revenue, followed by Europe at 21.4%, and Asia-Pacific and other regions at 11.2%. Revenue from the Americas and Europe grew 24% and 25%, respectively, while APAC and other markets recorded modest growth.

Fractal debuted on the Indian stock exchanges in February 2026 after raising about ₹2,834 crore through its IPO. The company said the quarter reflected sustained demand for enterprise AI solutions despite weakness in the TMT vertical, with improving margins underpinning stronger profit growth than revenue growth.

The company’s shares plunged on July 24, trading 5.94% lower at ₹810 apiece at 12:25 pm on the NSE.