Buy Fractal Analytics; target of Rs 1110: Prabhudas Lilladher

Prabhudas Lilladher is bullish on Fractal Analytics has recommended buy rating on the stock with a target price of Rs 1110 in its research report dated March 06, 2026.

Broker Research

March 09, 2026 / 12:03 IST

Buy

Prabhudas Lilladher's research report on Fractal Analytics

The revenue performance (+5.0%/14.0% CC QoQ/YoY) was tad below our estimates, attributed to softness in CPG and TMT verticals. The softness in CPG was macro-oriented, while the weakness in TMT was more structural and client specific. Otherwise, ex-TMT (~70% of revenue) the growth looks encouraging across other verticals (up ~27%+ YoY). Fractal.ai (98% of revenue) grew at a healthy pace (~7.7%/20.9% QoQ/YoY), while segmental margin expansion (+170bps QoQ) looks even more encouraging. However, the sequential softness in Fractal Alpha (-13.3%/+29% QoQ/YoY) attributed to a consol margin dilution of ~50bps QoQ. The company is pivoting from traditional way of billing to output based model, although it contributes marginal portion to the overall billings. We believe, as more products (Cogentiq/Qure.ai) get anchored around client ecosystem, it would make more relevant for Fractal to move away from traditional billing.

Outlook

Currently, the stock trades at 18x/14x EV/EBITDA FY27E/FY28E. We assign 20x (earlier 22x) EV/EBITDA to FY28E, arriving at a target price of Rs. 1,110. Retain BUY.

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