Prabhudas Lilladher upgrades Fractal Analytics to Buy with ₹1,010 target
Fractal Analytics just got a "Buy" upgrade from Prabhudas Lilladher, aiming for a ₹1,010 share price, even though its latest quarterly results weren't the strongest.
The company faced some revenue softness and margin dips, but analysts are optimistic about growth in areas outside tech and expect things to pick up later this year.
Fractal Q1FY27 revenue dips, Asper jumps
In Q1FY27, Fractal's revenue dipped slightly (0.4% quarter-over-quarter), missing forecasts due to weak performance in its tech segment (down 14%).
On the bright side, non-tech businesses grew 3.5% quarter-over-quarter and 23.7% year-over-year.
Its Asper platform saw a big jump too: Q1 revenue hit $9 million, while annual recurring revenue was up 59% from last year.
Fractal margins pressured, ₹1,010 target justified
Margins took a hit this quarter thanks to wage hikes and investments in talent. Still, Prabhudas Lilladher expects margins to recover as business improves in the second half of FY27.
Revenue growth projections have been trimmed, but EBITDA margins are expected to stay steady at 17%.
At its current valuation (19 times EV/EBITDA), analysts feel the ₹1,010 target is justified.