Fractal Analytics Jumps 7% After Brokerage ‘Buy’ Call

The stock price of the AI solutions provider Fractal Analytics rose by more than 7% on Tuesday following its disappointing first day of trading as a publicly-listed company.

Weak Market Debut

On its stock market debut on Monday, Fractal listed at ₹876 per share, down by around 2.7% from the issue price of ₹900. The stock plunged further during the day, closing at ₹873.70, representing a discount of 7% from the issue price. This gives the company a market capitalization of about ₹148.1 billion.

Fractal’s underwhelming stock market entry comes as India’s broader tech sector sees significant losses driven by investors’ fear of AI impact.

Buy Rating

Fractal’s stock rebounded on Tuesday following brokerage firm Prabhudas Lilladher’s bullish recommendation on the company’s coverage initiation. The brokerage said that Fractal has demonstrated a steady and reliable revenue trajectory over the last 10 years, robust client retention, strong sales engine as well as research and development-backed innovations.

“We initiate coverage on Fractal with ‘BUY’ rating and TP of Rs1,260, valuing at 22x EV/EBITDA FY28E, with potential upside of 40%,” the brokerage said in its report published on Monday. “We believe the decoupling of revenue and headcount growth, narrowing of ESOP costs, and improvement in high-margin SaaS-based revenue (Fractal Alpha) would help increase EBITDAM going forward.”

Poised for Growth

Prabhudas Lilladher is also optimistic of the AI sector’s continued growth. Fractal, which provided services to global titans including Microsoft, Meta, Tesla and Apple, specializes in AI engineering, decision sciences, cloud data platforms and industry-specific artificial intelligence products.

“Fractal operates in the analytics space that powers decision-making process for large enterprises by leveraging AI tools and services,” the report read. “The AI software market is poised for strong multi-year expansion, underpinned by accelerating enterprise adoption of AI platforms, domain-tuned foundation models, and vertically oriented AI applications.”