AI and analytics company Fractal Analytics’ stock jumped 5.77% during the intraday trading to touch an all-time high at ₹1,119.6 on the BSE today after its net profit more than doubled in Q4 FY26.

The stock gave up some of the gains later and was trading 1.49% higher at ₹1,074 at 12:40 IST. The company’s market capitalisation stood at ₹18,472 Cr (about $1.9 Bn).

Fractal reported a nearly 109% jump in its net profit to ₹115.8 Cr in Q4 compared to ₹55.5 Cr in the year-ago quarter. The bottom line improved 15.7% from ₹100.1 Cr in the preceding quarter.

Operating revenue surged 17% to ₹886.3 Cr during the quarter under review from ₹757.5 Cr in Q4 FY25. It grew a nominal 3.7% on a sequential basis.

The company attributed the improvement in profit to growing revenue, improving margins and strong demand in the BFSI and healthcare & life sciences segments.

For full FY26, Fractal’s consolidated net profit rose 30% YoY to ₹286.8 Cr, while revenue from operations shot up 19.3% YoY to ₹3,299.7 Cr. Its gross margin expanded 93 basis points YoY to 47% during the fiscal year under review.

The company claimed that it increased its $20 Mn+ clients to six in FY26 from five in the previous year, while $1 Mn+ sized clients grew to 59 in FY26 from 53 in FY25.

Earlier this month, Fractal overhauled its operations to restructure itself around enterprise AI. In a post-earnings call, the company’s management said it is currently “the best ever time to be an enterprise AI company” as it provides a 100X growth opportunity through the complete reimagination of enterprise workflows.

Going forward, the company plans to increase R&D spending to 10% of its revenue from the current 6.5%, with a focus on foundational models, agentic AI platforms and enterprise AI transformation tools. However, it noted that the priority remains to continue the profitability journey rather than aggressively reinvesting in AI that could potentially harm margins.

“We want to increase our revenue growth rate while expanding gross margins, not by sacrificing gross margins… we want to also make sure that we are operating at a certain level of profitability while growing at the maximum possible rate,” Fractal cofounder and group CEO Srikanth Velamakanni said during the call.

However, he didn’t provide any revenue guidance. He noted that despite enterprise AI expected to take off substantially in the coming years, it is difficult to predict how much of the technology its enterprise clients want to implement right now. “There are still companies understanding and implementing AI for the first time, figuring it out before they can expand dramatically,” he said.

As per the executive, the enterprise AI opportunity has moved beyond CTOs to the entire C-suite, where senior leadership is redesigning workflows and organisational processes, from revenue management to hiring to customer engagement.

Citing the example of a pharmaceutical company that adopted its agentic AI offerings, he said the client reduced its response time to healthcare practitioners to 15-60 seconds from four days earlier.

Despite the AI opportunity it is banking on for future growth, Fractal’s concentration in certain sectors weighed on revenue growth during the fiscal. For instance, declining healthcare spending in the US, which, combined with the remaining Americas, accounted for 68% of its overall revenue, dragged down revenue growth in FY26.

“What we are seeing is a net result of extreme excitement around enterprise AI tempered with some of the macroeconomic related situations that exist,” Velamakanni said.

Last year, the Trump administration’s Department of Government Efficiency (DOGE) shuttered USAID, which sponsored tuberculosis programmes in the country and was one of the biggest clients for its healthcare diagnostics subsidiary Qure.ai. While that revenue source dried up instantly following the cuts, the company noted that the offering is sitting on a huge order pipeline and is more than likely to recover from the setback in the current fiscal.

“Some of the losses that we’ve experienced in this fiscal year, through the IPO process and after that Qure.ai has been a huge drag on our overall profitability. That drag is getting lifted as we speak. And Qure.ai will have a much better year and also not contribute to additional losses to Fractal,” he said.

The company also faced client-specific issues during the quarter, with three clients in the technology, media, and telecommunications (TMT) vertical dragging down its revenue growth in FY26.

Going forward, the company expects significant margin growth as it shifts business to output- and outcome-driven models from the current input-driven models, which could translate to a 5-7 basis point difference in pricing and additional gross margin. Additionally, license-driven models could further improve gross margins by 25-30 basis points.

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