IGI Logo

Key Conference Call Highlights

Segment Performance

* HLS: This was the standout leader, delivering an exceptional 13% QoQ growth in Q4. It has now become the company's second-largest vertical on a quarterly run rate basis.

* BFSI: This segment grew by 14.5% QoQ in Q4.

* CPGR: Remained the company’s largest vertical, contributing 37% of total revenue, though it grew at a more modest 6.2% QoQ in Q4, due to weakness in the first half of the year.

* TMT: This vertical declined 13.2% QoQ in Q4 due to two specific client issues: one client entering a joint venture that reduced work with Fractal to near zero, and another facing massive internal restructuring.

Business Segment:

* Fractal Alpha (IP-led businesses): This segment, which includes Asper.ai and Analytics Vidhya, grew 41% in the year. The latter specifically grew by 49%, while Asper grew by 31%. Segment losses narrowed down significantly from INR 26 Cr in FY25 to INR 15 Cr in FY26.

Geographical Performance

* Europe: Led geographical growth with a 34% increase for the full year.

* Americas: Grew by 20% over the fiscal year.

* APAC: Declined 3% for the year due to the same client-specific issues affecting the TMT vertical, though growth turned positive in Q4 at 7%.

Margin Trajectory

* Adjusted EBITDA: The Q4 adjusted EBITDA margin reached 22%, up 189 bps YoY. For the full year, the adjusted EBITDA margin was 17.6%.

* Gross Margin: Expanded by 93 bps for the full year to reach 46.8% supported by higher contribution from output-based contracts, pricing improvements and FX tailwinds.

* Efficiency Levers & Headwinds: Margin expansion was driven by a shift toward output-based contracts, price increases, and productivity improvements, which contributed 218 bps to the full-year gross margin. These gains were partially offset by annual merit increases, which had a negative impact of 304 bps on the full-year gross margin.

* R&D Investment: The company invested INR 212 crore in R&D during FY26, representing 48% growth over the prior year.

Outlook & Guidance

* Engagement Model Target: The company aims for 60% of its revenue to come from output, outcome, or license-based models in the medium term.

* License Revenue Goal: Management plans to increase license-driven revenue from the current 3% to 20% by 2030.

AI Initiatives

* Strategic Framework: The company operates through three pillars: i) AI-led transformation (process redesign), ii) AI foundations (data and agents), and iii) AI for work and workforce transformation (people dimension).

* Cogentiq Platform: All strategic pillars run on Cogentiq, an agentic AI platform that allows agents to plan, coordinate, and execute work reliably within enterprise systems.

Product Innovations:

* Flyfish.ai: An agentic sales platform featuring 35 coordinated agents to manage the sales pipeline.

* Vaidya 2.0: A healthcare foundation model that achieved record scores for clinical reasoning.

* Pi Evolve: An agentic engine for autonomous machine learning.

For Detailed Report With Disclaimer Visit. https://choicebroking.in/disclaimer
SEBI Registration no.: INZ 000160131