Fractal Analytics IPO: India's first AI company IPO
One company you should definetely check
After a gap of a couple of weeks, we have two more IPO lined up for next week. Today, we are going to cover Fractal Analytics IPO.
For more such content, please subscribe to my newsletter.
I publish 15+ blogs on my Substack every week. But starting next week (Feb) only one will be delivered to your inbox. Keep visiting to read more. Join Whatsapp Community to get all posts.
Fractal Analytics IPO: Key Details
Price band: a price band of Rs 857 to 900 per share
IPO Date: 9 Feb to 11 Feb
Tentative Listing Date: 16 Feb
Lot Size: 16 shares
Employee Discount: Rs 85 per share
Fractal Analytics IPO: Company Details
Founded in 2000, the company is a globally recognised enterprise artificial intelligence company, according to the Everest Report. Its stated vision is to power human decision making within client enterprises by leveraging AI. It supports large global organisations with data driven insights and helps them make better decisions through end to end AI solutions.
These solutions are built on technical, domain and functional capabilities developed over more than 25 years of operating history. As of September 30, 2025, the company’s full suite of AI offerings is organised into two segments. Fractal.ai includes AI services and AI products, primarily hosted on Cogentiq. Fractal Alpha comprises the company’s AI businesses. Together, these two segments address a wide range of business needs across industries and functions.
The company works with large global enterprise clients, supporting them across the full life cycle of AI transformation, from ideation to adoption, with the objective of enabling better decision making within enterprises. It aims to position itself as a long term, trusted partner to its clients. A key focus is on “Must Win Clients” (MWCs), defined as clients from whom revenue was recognised in the trailing 12 months and who meet at least one of three criteria: annual revenue exceeding US$10 billion, market capitalisation above US$20 billion, or an end customer base of more than 30 million.
As of September 30, 2025, the company served 122 MWCs. Its client roster includes Citibank, Costco, Franklin Templeton, Mars, Mondelez, Nationwide, Nestlé and Philips, among others. As of March 31, 2025, it also served a majority of the so called “Magnificent Seven” companies, according to the Everest Report.
The company is positioned as India’s leading pure play enterprise data, analytics and AI player, with global recognition and capabilities spanning the entire data, analytics and AI value chain. It has made active investments to expand its AI and generative AI software portfolio, alongside strengthening research and development capabilities.
Fractal Analytics IPO: Financials
Revenue Growth: The company has delivered steady revenue growth across periods. Revenue from operations rose 19.9% to Rs 1,559 crore in the six months ended September 30, 2025, compared with Rs 1,300.7 crore in the same period last year. On a full year basis, revenue increased 25.9% to Rs 2,765.4 crore in FY25 from Rs 2,196.3 crore in FY24, which itself was a 10.6% increase last year.
EBITDA Margin: Operating margins have also strengthened. EBITDA margins were 11.9% and 10.1% in the six months ende985.4 crore in FY23.
PAT Margin: Profitability at the net level has shown visible improvement over time. PAT margins stood at 4.5% and 5.6% in the six months ended September 30, 2025 and 2024 respectively. For the full year, PAT margins were 8.0% in FY25, (2.5)% in FY24, and 9.8% in FY23, reflecting the impact of earnings volatility in FY24 and recovery thereafter.
Adjusted PAT Margin: On an adjusted basis, margins remain healthier and more stable. Adjusted PAT margins were 9.2% in the six months ended September 30, 2025 and 10.4% in the corresponding periodd September 30, 2025 and 2024 respectively. For the full year, EBITDA margins improved to 14.4% in FY25, compared with 4.4% in FY24 and 22.0% in FY23.
Adjusted EBITDA Margin: Adjusted EBITDA margins highlight the core operating strength of the business. These margins stood at 15.0% in the six months ended September 30, 2025 and 15.9% in the same period last year. On an annual basis, adjusted EBITDA margins were 17.4% in FY25, 10.6% in FY24, and 6.8% in FY23, reflecting consistent improvement over the long term.
Based on FY25 numbers, the Fractal company is trading at PE of 70. If we annualize its FY26 earning, the PE is 109.
Fractal Analytics IPO: Strengths
Below are company’s strength:
Leading Player in a large and growing AI market
Long-standing and growing relationships with marquee, global clients contributing to a diversified revenue base
Deep and integrated technical, domain and functional expertise
Track record of inventing and investing to benefit clients
Fractal Analytics IPO: Key Risks
Cybersecurity and Data Protection Risk: The business is exposed to risks from security breaches, cyber-attacks, computer viruses and hacking incidents. Any such event could disrupt operations, compromise sensitive data and have a material adverse impact on financial performance and operating results.
Client Concentration and Relationship Risk: A significant portion of revenue is dependent on a concentrated client base. In the six months ended September 30, 2025, 54.2% of revenue in the Fractal.ai segment came from the top ten clients, with a single client accounting for 8.2% of revenue. Additionally, 79.6% of Fractal.ai revenue was derived from existing Must Win Clients. An inability to retain these clients, deepen existing relationships or onboard new large clients could negatively affect revenues, cash flows and overall financial performance.
Industry Concentration Risk: Revenue is meaningfully exposed to a few key industries. In the six months ended September 30, 2025, the consumer packaged goods and retail segment contributed 37.5% of Fractal.ai revenue, followed by technology, media and telecom at 27.2%, healthcare and life sciences at 17.0%, and banking, financial services and insurance at 12.2%. Any slowdown in AI adoption or spending within these sectors could adversely impact business performance and growth prospects.
Profitability and Loss History Risk: The company reported a net loss in FY24 and losses before exceptional items and tax expenses in FY23 and FY24. While profitability improved in FY25, there is no assurance that losses will not recur as the company continues to invest in expansion, product development and new capabilities.
Fractal Analytics IPO: GMP
Fractal Analytics Grey Market Premium is current 2% as of 9 Feb. I will update this as we come closer to the IPO subscription open date.
Check results of my 2 fav companies
About me - In the last few years, I have noticed that many investors struggle with basic investment concepts. To address this, I have started a personalized newsletter offering easy-to-understand, actionable insights to help investors make better decisions. I have written over 5000+ financial blogs and want to share my knowledge and investing journey with you so you can become a confident investor. Join my journey. SUBSCRIBE NOW