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A source-linked quarter view: reported numbers, management language, guidance, and the risks that should carry forward.
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Revenue
₹854.4 Cr
verified against source
Revenue YoY
21%
reported change
EBITDA
Pending
latest reported figure
Source
screener in
record provenance
Actual signal trajectory
Where this quarter sits.
Quarter read
What the record says.
Fractal delivered a strong Q3 FY26 with revenue of ₹854 crore, up 21% YoY, driven by 78% YoY growth in healthcare & life sciences and 26% in BFSI. Gross margin expanded 17 bps to 47.2%, while adjusted EBITDA margin improved 43 bps to 17.8%. PAT crossed ₹100 crore, up 10% YoY despite higher associate losses. Net revenue retention remained healthy at 114%, and must-win clients grew to 127. Management expects revenue growth to accelerate, aided by AI adoption and expansion of output-based contracts. Gross margin expansion and operating leverage should drive EBITDA margin improvement, though R&D investment (4.1% of revenue) will persist. Key risk: tariff uncertainty in CPG & retail, the largest vertical, could temper near-term growth.
Colored figures show movement against the previous available record.
Guidance to track
- Management expects revenue growth to accelerate as AI adoption expands, targeting the historical 30% CAGR over 3-4 year periods.
- Gross margins are expected to expand further driven by mix shift to output-based contracts and productivity improvements.
- Adjusted EBITDA margin is expected to expand as SG&A leverage improves and ESOP charges decline, while R&D investment continues.
- Management plans to continue investing 4%+ of revenue in AI R&D, potentially increasing as gross margins expand.
Risks flagged
- CPG & retail, Fractal's largest vertical (36% of revenue), grew only 14% YoY due to tariff-related headwinds and macroeconomic uncertainty, which could persist.
- Two client-specific issues in telecom (Australia) and technology (US) caused a 6% YoY decline in APAC and dragged TMT vertical growth. Management noted these are exceptions but churn is ~1% of revenue.
- Fractal's share of losses from Qure.ai increased to ₹19 crore (2.2% of revenue) from ₹3 crore last year, driven by US aid cuts. This weighed on PAT growth.
- Analyst raised concern about potential competition from frontier AI model providers (e.g., OpenAI, Anthropic) entering enterprise workflow automation. Management argued they are complementary, but risk remains.
Key quotes
- We delivered a fantastic quarter, improving on nearly every metric.
- Our strategic intent is to generate at least $1 billion of impact for each of our clients.
- We expect our revenues will continue to accelerate at a faster pace.
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