Fractal Analytics Ltd's Q2 FY27 numbers came in strong, with revenue of Rs. 956.50 Cr (+19.79% YoY) and PAT growth of +138.55% YoY. Here's a quick read of what worked, what to watch, and what management said.
| Results date | November 03, 2026 |
|---|---|
| Revenue (Q2) | Rs. 956.50 Cr (+19.79% YoY) |
| PAT (Q2) | Rs. 79.20 Cr (+138.55% YoY) |
| EBITDA margin | 16.28% (+491 bps YoY) |
| EPS (Q2) | Rs. 4.71 (+119.07% YoY) |
Fractal delivered 19.79% YoY revenue growth with sequential re-acceleration to +4.82% QoQ, while PAT grew 138.55% YoY (115.92% normalized) and EBITDA margin expanded ~490 bps YoY. Management's prior commitments — merit-increase margin drag, ESOP cost decline, Alpha scaling, and historical-rate growth — were all delivered on track, with debt fully repaid and Rs.607.8 Cr of IPO proceeds available for M&A. Watch items are the 72 bps QoQ Adjusted EBITDA margin compression, other expenses outgrowing revenue, the persistent ~Rs.23 Cr Qure.ai associate drag, and negative H1 operating cash flow.
| Driver | What happened | Verdict |
|---|---|---|
| FX tailwind to revenue/margin ("rupee held in the mid-Rs.95s") | revenue +19.79% YoY; FX not quantified in filing | Partially |
| Guided 120–130 bps merit drag lands in Q2 | Adj. EBITDA margin −72 bps QoQ (16.16% vs 16.89%) | Played out |
| TMT bottoming tested against unchanged hyperscaler capex mix | no vertical split in filing | Not observable |
| Q2 FY26 soft base flatters YoY; sequential bridge is the honest test | reported +138.55% YoY vs +9.54% QoQ / +17.90% normalized QoQ | Played out |
| "A second consecutive negative operating-cash-flow quarter would sit awkwardly" | H1 CFO −Rs.23.7 Cr; derived Q2 CFO ≈ +Rs.79.3 Cr | Partially |
| First Cogentiq/license disclosure due this call | absent from the filing — open for the call | Not observable |
| Alpha loss trajectory watch | −Rs.11.2 Cr vs −Rs.14.8 Cr Q1, −Rs.8.7 Cr YoY | Partially |
| Qure.ai backlog to shrink the ~Rs.23 Cr drag | Rs.23.2 Cr loss, unchanged — not yet shrinking | Contradicted |
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| What management said | Where | What happened | Verdict |
|---|---|---|---|
| Merit-increase drag 120–130 bps on full P&L | guided on the Q1 FY27 earnings call ("120–130 bps impact on the full P&L… in Q2 FY27") | Adj. EBITDA margin 16.16% vs 16.89% in Q1 (like-for-like): −72 bps sequential | On Track |
| "Profitability will continue to improve over the next few quarters" | guided on the Q4 FY26 earnings call | Adj. EBITDA margin +~120 bps YoY (16.16% vs 15.0% company-reported) but −72 bps QoQ — YoY basis | On Track |
| ESOP charges decline as % of revenue | guided on the Q4 FY26 earnings call | 0.47% vs 1.23% Q1 and 2.27% year-ago | Met |
| Fractal Alpha: FY27 contribution above prior year, growing faster than group | guided on the Q4 FY26 earnings call | revenue +39.92% YoY vs group +19.79%; share 3.50% vs 3.04% | On Track |
| Revenue growth at historical rates (FY26 +19.3%) | guided on the Q4 FY26 earnings call | +19.79% YoY, H1 +19.88% | On Track |
| Outcome/license mix 60% of revenue | guided on the Q4 FY26 earnings call | not derivable from the filing | Too Early |
| License revenue ~20% by 2030 | guided on the Q4 FY26 earnings call | not derivable from the filing | Too Early |
| Asper.ai acceleration | guided on the Q1 FY27 earnings call | H2 event; not observable | Too Early |
| "Growth this quarter was not as high as we would like" (Q1, ex-TMT framing) | Q1 FY27 call | Q2 growth +19.79% YoY, +4.82% QoQ — sequential re-acceleration — direction of travel improved | Confirmed |
| Margins are expanding | Q1 FY27 call | line-(3) margin 13.22% vs 9.12% YoY; Adj. EBITDA margin up YoY, down QoQ | Confirmed YoY / QoQ mixed |
Disclaimer: This results analysis is published for educational and informational purposes only. It is not investment advice, not a recommendation to buy, sell or hold any security.