Fractal posts first $100 million quarter; Q2 profit up 139%
Fractal Analytics reported Q2 FY27 revenue of Rs 956.5 crore, up 20% (10% in constant currency), and net income up 139% to Rs 79.2 crore.
Fractal Analytics, the Mumbai-based enterprise AI company listed in February, said on 3 November 2026 that its July to September revenue passed $100 million for the first time. Operating revenue was Rs 956.5 crore, up 20% from a year earlier, and net income rose 139% to Rs 79.2 crore, according to the company's press release. Entrackr reported the same figures on 4 November. One detail in the release changes how the growth reads: in constant currency, revenue rose only 10%.
What Fractal reported
The company's consolidated operating revenue for the quarter ended 30 September 2026 was Rs 956.5 crore. Entrackr, citing the filing, puts total expenses at Rs 859 crore, up 15% from Rs 747 crore, and non-operating income at Rs 29 crore, for total income of Rs 985 crore. Net income of Rs 79.2 crore compares with Rs 33 crore in the same quarter last year and Rs 72 crore in the June quarter, so profit rose about 10% in one quarter. Revenue in June was Rs 913 crore, which makes quarter-on-quarter growth about 4.7%.
Adjusted EBITDA margin, which is operating profit before interest, tax, depreciation and certain adjustments, expanded by 123 basis points to 16%. A basis point is one hundredth of a percentage point, so 123 basis points is 1.23 percentage points. The headline of the release says EBITDA grew 71% over the year. Employee costs were Rs 657 crore, up 4%, and make up more than three-quarters of all expenses, the Entrackr report says. For a firm whose product is the work of about 6,000 professionals, that is the line that decides margins.
The release is a company document, so every number above is company-reported. The profit and expense lines come from Entrackr's reading of the exchange filing and match the release where they overlap.
Reading the growth: reported against constant currency
The release gives two growth rates for revenue: 20% reported and 10% in constant currency. Constant currency strips out the effect of exchange-rate moves by recalculating this year's foreign earnings at last year's rates. Fractal serves Fortune 500 clients, has staff across North America, Europe and Asia-Pacific, and reports in rupees; it also states its milestone in dollars, which implies a large share of dollar revenue, though the release gives no currency split. When the rupee weakens, the same dollar of revenue becomes more rupees, so reported growth runs ahead of underlying growth.
In plain terms, about half of the rupee growth came from the exchange rate rather than from selling more. The $100 million milestone is also stated in dollars, which is the right way to judge a business with dollar clients. The release does not give the exchange rate it used, so the precise split between currency and volume cannot be checked here.
The industries driving it
Growth was led by healthcare and life sciences, up 79% over the year, and banking, financial services and insurance, up 30%. Fractal's largest vertical, consumer packaged goods and retail, grew 11%. The technology, media and telecom vertical, recovered by 6% from the previous quarter, which the release calls a strong sequential recovery. The release does not give the vertical's size or its year-on-year change, so the scale of the recovery is unknown.
Two further measures describe the client base. Net revenue retention, which compares this period's revenue from clients who existed at the start of the period with their revenue in the previous period, was 115% in the Fractal.ai segment. A figure above 100% means existing clients are spending more in total than before. The company's net promoter score was 76; this is a survey-based measure of whether clients would recommend it, and the company supplies no method here.
Products matter to the investment story because they earn recurring fees rather than billing by the hour. Fractal says its products, including the Cogentiq agentic AI platform, reached an annual revenue run-rate above Rs 150 crore, up 39%. That is roughly 4% to 5% of annualised revenue, going by the quarterly figure above, so services still dominate. An agentic AI platform is software that lets AI systems carry out multi-step tasks, such as checking records and drafting a response, with limited human steering.
The company behind the numbers
Fractal lists on the stock exchanges as FRACTAL. Entrackr reports that its initial public offering in February raised Rs 2,834 crore from a fresh issue and an offer for sale, in which the investors Apax Partners and TPG Capital sold shares, and that the shares listed at a 3% discount to the issue price. At about Rs 808 a share, the report puts its market value near Rs 14,120 crore. Those market figures were as of the day of the report and will have moved.
The release describes a company that spends more than 6% of revenue on AI research and builds its own models, including the Fathom reasoning models. It says Fractal was selected under the IndiaAI Mission to build a large reasoning model for India, and that its healthcare model, Vaidya 2.0, was the first to score above 50 on OpenAI's HealthBench Hard test. That is a company claim about a benchmark, a standardised test, and the release does not link to the test results. It also notes that Fractal incubated and spun out Qure.ai, a medical-imaging AI firm.
What it means for readers
For employers and technology buyers, Fractal's numbers show that large companies are paying for AI work in specific industries, healthcare above all, rather than across the board. A 79% rise in one vertical on a small base can shift quickly, so one quarter is not a trend.
For people working in data and AI in India, the result shows a listed services-and-products company growing profit faster than revenue. Employee costs rose only 4% while revenue rose 20%, which suggests either higher billing per person or a tighter team; the release does not say which. For investors and analysts, the gap between reported and constant-currency growth is the number to track, because a stronger rupee would reverse the tailwind.
The simulator below lets you test the currency effect and the margin. Its default values are the reported figures; the prior-year revenue is the Entrackr figure of Rs 798 crore.
What to watch next
The next test is the December-quarter result, in which technology, media and telecom should show whether the recovery holds. Watch the constant-currency growth rate, which is the cleaner gauge of demand, and whether the healthcare vertical keeps growing at such a rate. The progress of the large reasoning model under the IndiaAI Mission is a separate item to follow, though no delivery date appears in the sources read here.
Key takeaways
- Fractal's Q2 FY27 operating revenue was Rs 956.5 crore, its first quarter above $100 million, up 20% in rupees but 10% in constant currency.
- Net income rose 139% to Rs 79.2 crore, and adjusted EBITDA margin widened by 123 basis points to 16%.
- Healthcare and life sciences grew 79% and financial services 30%, while the largest vertical, consumer goods and retail, grew 11%.
- Products, including the Cogentiq agentic AI platform, reached a run-rate above Rs 150 crore, up 39%, still a small part of revenue.
- The figures are company-reported; the claim about a benchmark score has not been independently checked.
Sources
- [Fractal Analytics: Q2 FY27 press release (Mumbai, 3 November 2026)](https://fractal.ai/docs/Investor-Relations/Financial-Statements-and-Annual-Reports/2027/Q2/Fractal-Press-release-Q2-27.pdf)
- [Entrackr: Fractal posts Rs 956 Cr revenue in Q2 FY27; profit surges 2.4X to Rs 79 Cr](https://entrackr.com/fintrackr/fractal-posts-rs-956-cr-revenue-in-q2-fy27-profit-surges-24x-to-rs-79-cr-12781901)
Tags: Fractal Analytics Enterprise AI Quarterly results IndiaAI Mission Agentic AI