Synopsis: A recently listed AI stock has fallen about 13% amid IT sector weakness, high valuation concerns with P/E above peers, and promoter share pledging soon after listing, triggering investor caution.
A Recently listed company that is a global enterprise AI and analytics firm that provides AI Solution, is in the spotlight as investors are concerned to know the reason why this stock has fallen by 13 percent since listing.
With the market capitalization of Rs. 13,524.20 crore, the shares of Fractal Analytics Limited closed at Rs. 786.45 per equity share, down by 1.87 percent from its previous day’s close price of Rs. 811.70 per equity share. Since the issue price of Rs. 900, the stock has fallen by 12.67 percent.
Possible Reason for the Fall
Sectoral Weakness Weighs on Stock
The recent 13 percent decline in Fractal Analytics stock may be partly attributed to broader weakness in the IT sector. IT stocks have been under pressure, with the Nifty IT index correcting nearly 20 percent over the past one month. Such sharp sector-wide selling often impacts even newly listed companies, as investors reduce exposure to technology stocks amid valuation concerns and global uncertainty. The negative sentiment across the IT space appears to have contributed to the stock’s recent fall.
High Valuation Concerns
Another major factor behind the correction is valuation pressure. Currently, the stock is trading at a price-to-earnings (P/E) ratio of 78x. At the time of listing, its P/E stood even higher at 109x, significantly above the industry average P/E of 22.6x. This steep premium compared to peers may have triggered profit booking, as investors reassess whether such elevated valuations are justified amid sectoral headwinds.
Promoter Share Pledge Raises Questions
Investor sentiment may also have been impacted by promoter activity. The company was listed on February 16, 2026, and within a short span, promoter Srikant Velamakanni pledged around 3.69 lakh shares. Although the quantum may be relatively small in proportion to overall holdings, promoter pledging soon after listing can raise concerns among investors and add to short-term volatility in the stock.
Financials
The company reported steady balance sheet growth, with total assets increasing to Rs. 2,965.40 crore as of September 30, 2025, from Rs. 2,857.60 crore in March 2025. Net worth rose to Rs. 1,957.50 crore, backed by reserves of Rs. 1,937.10 crore, while total borrowings stood at Rs. 274.60 crore, reflecting a relatively comfortable leverage position.
In terms of performance, total income for the latest period was Rs. 1,594.30 crore, with a profit after tax of Rs. 70.90 crore. EBITDA stood at Rs. 185.60 crore, resulting in an EBITDA margin of 11.90 percent. The return on net worth was 3.6 percent, and the PAT margin was 4.50 percent, indicating moderate profitability levels.
Fractal Analytics, founded in March 2000, is a global enterprise AI and analytics firm that helps large organisations make data-driven decisions through scalable AI solutions. The company serves leading global clients such as Citi, Costco, Franklin Templeton, Mars, Mondelez, Nestle, Philips, and Nationwide, reflecting its strong global credibility and leadership in the expanding AI market.
As of September 30, 2025, it operates through two key segments: Fractal.ai, which delivers AI services and products via its Cogentiq platform with low-code, governance, and security capabilities, and Fractal Alpha, which focuses on independent AI ventures in high-growth markets.
With a price range of Rs. 857 to Rs. 900 per equity share, Fractal Analytics Limited launched its initial public offering (IPO). The subscription period was open from February 9 to February 11, 2026. On February 16, 2025, the company’s shares went public on the BSE and NSE platform, initially trading for Rs. 876 per share.
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