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Fractal Analytics Eyes Profit Boost Post-IPO
16 Feb
Summary
- Fractal Analytics anticipates improved profit margins after its IPO.
- License-led revenue and operating leverage are key drivers.
- Strong demand is noted from healthcare and consumer sectors.
Fractal Analytics, an AI and advanced analytics firm, is projecting enhanced profit margins in its upcoming post-IPO phase. This positive outlook is supported by a projected rise in license-led revenue, alongside anticipated benefits from operating leverage.
The company's co-founders highlighted that Fractal already maintains healthy gross margins, which are expected to expand further as license-based revenue from its AI platforms increases. Significant investments in sales infrastructure and general administration are not projected to scale at the same rate as revenue growth, suggesting a future uplift in EBITDA margins.
Fractal reported an adjusted EBITDA margin close to 20% in the previous quarter and generated nearly ₹500 crore in operating cash flow last year. The firm anticipates similar cash generation for the current financial year, underscoring its strong profitability and cash flow.
Optimism is particularly high for the healthcare and life sciences sectors, where accelerating AI adoption presents sustained opportunities. The company also sees continued strength in the consumer packaged goods (CPG) vertical. Despite potential deflationary concerns from AI, Fractal believes global technology spending will increase, driven by broader AI adoption.
