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Tariff uncertainty in CPG & retail vertical
View Risks →Fractal Analytics Ltd — Q3 FY26
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.
bullish
high
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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.
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Must-win clients
127
+14 vs Mar'25
Must-win clients (MWCs) increased from 113 in March 2025 to 127, now contributing 83% of revenue.
Net revenue retention (NRR)
114%
Flat YoY
NRR of 114% indicates strong existing client expansion, contributing 14 points of revenue growth.
Healthcare & life sciences growth
78%
+78pp YoY
Healthcare & life sciences was the fastest-growing vertical, driven by strategic investments and AI solutions.
Revenue per billable headcount
$85,000
+6% YoY (INR terms)
Revenue per billable headcount increased 6% in INR terms, reflecting productivity improvements and mix shift.
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Guidance and risk preview
Management expects revenue growth to accelerate as AI adoption expands, targeting the historical 30% CAGR over 3-4 year periods.
CPG & retail, Fractal's largest vertical (36% of revenue), grew only 14% YoY due to tariff-related headwinds and macroeconomic uncertainty, which c...
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