Fractal Analytics said on Tuesday its consolidated profit after tax surged 109% to Rs 116 crore in the January–March quarter, up from Rs 55.5 crore a year ago, as its Healthcare and Life Sciences division posted 82% year-on-year growth, the sharpest quarterly expansion of any segment the company has reported. Revenue from operations rose 17% to Rs 886 crore, and gross margins expanded 47 basis points to 48.2%, the highest level in two years.
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Healthcare and BFSI Lead; Telecom Drags
The HLS segment is now unambiguously carrying Fractal’s growth story. For the full year FY26, it grew 66%, meaning Q4 accelerated well beyond the annual average. That kind of late-year acceleration is either a client concentration event or genuine demand inflection. Based on Velamakanni’s commentary, it is the latter.
Banking, Financial Services, and Insurance also had a strong quarter, growing 42% year-over-year in Q4, against a full-year figure of 32%. Consumer, Packaged Goods and Retail contributed 37% of full-year revenue and grew 12%.
What did not get discussed much in the earnings statement: Technology, Media and Telecom declined 19% in Q4 FY26 and finished the full year roughly flat at negative 1%. For a segment that accounts for a quarter of Fractal’s revenue mix, that is a meaningful drag and the one number missing from most earnings coverage of this result.
Margin Expansion Is the Underreported Story
Revenue growing 17% with expenses growing only 12% is how you get a 109% profit jump. Total expenditure in Q4 came in at Rs 755.6 crore, against Rs 674.6 crore a year ago. Employee benefits, the largest cost line at nearly 75% of total expenses, rose 8.6% to Rs 570 crore, well below revenue growth.
The result: gross margin reached 48.2%, up 47 basis points year-on-year. Adjusted EBITDA margin expanded 189 basis points to 22%. These are not rounding-error improvements; 189 basis points of EBITDA expansion in a single year is a structural margin re-rating, not a one-quarter anomaly.
For the full year FY26, revenue grew 19% to Rs 3,299.7 crore from Rs 2,765.4 crore in FY25. Annual PAT rose 30% to Rs 286.8 crore.
Key Financials at a Glance
| Metric | Q4 FY26 | Q4 FY25 | YoY Change |
|---|---|---|---|
| Revenue from Operations | Rs 886 crore | Rs 757.5 crore | +17% |
| Profit After Tax | Rs 116 crore | Rs 55.5 crore | +109% |
| Gross Margin | 48.2% | 47.7% | +47 bps |
| Adjusted EBITDA Margin | 22% | ~20.1% | +189 bps |
| Basic EPS | Rs 7.07 | Rs 3.54 | +100% |
| Full-Year Revenue (FY26) | Rs 3,299.7 crore | Rs 2,765.4 crore | +19% |
| Full-Year PAT (FY26) | Rs 286.8 crore | Rs 221 crore | +30% |
| HLS Segment Growth (Q4) | +82% YoY | — | — |
| BFSI Segment Growth (Q4) | +42% YoY | — | — |
| TMT Segment Growth (Q4) | -19% YoY | — | — |
| Americas Revenue Share | 68% | — | +17% YoY |
| Europe Revenue Share | 18% | — | +24% YoY |
| APAC Revenue | 13% | — | -3% YoY |
Source: Fractal Analytics NSE investor presentation and audited results
Geography: Europe Accelerates, APAC Slips
Americas at 68% of revenue, grew 17% in Q4 and 20% for the full year. Europe, at 18% of revenue, grew 24% in Q4 and 34% for the full year, making it the fastest-growing geography by annual rate. APAC and Others, which contribute 13% of revenue, declined 3% for the full year. That APAC decline is quiet but worth flagging, it suggests Fractal’s growth story is almost entirely a Western-market narrative at this stage.
Client Retention Is Proving the Business Model
The wallet-share argument is not editorial spin; it is in the numbers. Net Revenue Retention stood at 112% in Q4 FY26 and 117% for the full year, meaning existing clients spent 17% more with Fractal in FY26 than they did in FY25, without a single new logo required to generate that growth. Client relationships worth $1 million or more annually grew from 53 to 59. Relationships worth $20 million or more grew from 5 to 6.
Days Sales Outstanding improved to 72 days in FY26 from 74 days in FY25, a small but directionally positive signal on collections efficiency. Cash flow from operations for the full year was Rs 4,090 crore, representing 70% of adjusted EBITDA.
Group CEO Srikanth Velamakanni said Fractal was selected as a strategic execution partner by a top-five US life sciences company to deliver two flagship AI companions, one across commercial pharma marketing and one in field excellence. He did not name the client. Net Promoter Score for the quarter was 81, up 6 points year-on-year.
Debt-Free After IPO Proceeds Deployed
Fractal ended FY26 with Rs 2,052 crore in cash, which includes Rs 957 crore of IPO proceeds. In April 2026, after the quarter closed, the company used those proceeds to retire its entire long-term debt.
The company’s R&D investment ran at 6.4% of revenue for the full year, up 125 basis points year-on-year. R&D operating expenditure specifically was 4.1% of revenue. With a clean balance sheet and rising R&D intensity, the directional bet on proprietary IP, including platforms Cogentiq, Iqigai, and Kalaido.ai, is getting more capital behind it heading into FY27, even without a formal guidance number attached.
Fractal had 5,868 employees as of March 31, 2026. Revenue per billable FTE was $85,000 on a trailing twelve-month basis, up 5% year-on-year. The company holds 59 patents granted and pending as of the same date.
What to Watch in FY27
The base effect on HLS is the single biggest variable heading into Q1 FY27. An 82% Q4 growth rate in one segment creates a high comparison quarter that is structurally difficult to repeat. Whether that becomes a headwind depends on whether the top-five US life sciences partnership expands in scope or whether the pipeline of similar mandates is as deep as the earnings commentary implies.
TMT’s 19% Q4 decline is the other number worth tracking. A segment that contributes 25% of revenue and is contracting while the rest of the business grows is a drag that will matter more in a slower-growth year than it did in FY26.
The Q1 FY27 result is the first real test of whether FY26’s margin expansion holds at scale.
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FAQ
What drove Fractal Analytics’ profit doubling in Q4 FY26?
The Healthcare and Life Sciences segment grew 82% year-on-year in Q4, the fastest of any division. Simultaneously, total expenses grew only 12% against 17% revenue growth, expanding gross margins to 48.2% and EBITDA margins to 22%.
What is Fractal Analytics’ Net Revenue Retention rate?
NRR stood at 112% in Q4 FY26 and 117% for the full year FY26, meaning existing clients spent 17% more with Fractal year-on-year. Million-dollar-plus client relationships grew from 53 to 59 during the year.
Is Fractal Analytics debt-free after the IPO?
Yes. The company used Rs 957 crore of IPO proceeds to repay all long-term debt in April 2026, post the quarter close. It held Rs 2,052 crore in total cash at FY26 year-end. R&D investment is running at 6.4% of revenue, up 125 basis points year-on-year, indicating where the freed-up capital is being directed.
