FRACTAL

** Shares of Fractal Analytics FRAL.NS rise 5.6% to 895 rupees

** PL Capital starts coverage on stock with "buy" rating, sets PT at 1,260, implying ~49% upside to its last close

** On Monday, stock debuted at 876 rupees vs IPO issue price of 900 rupees

** Brokerage says FRAL has demonstrated consistent and steady revenue performance over the past decade along with robust client retention

** Decoupling of revenue and headcount growth, narrowing of ESOP costs, and improvement in high-margin SaaS-based revenue would help increase EBITDAM going forward, PL Capital says

** Brokerage expects USD revenue/INR EBITDA/INR PAT CAGR at 19.3%/30.9%/44.5% over FY26E-28E, respectively

** FRAL's vertical and functional mix is well aligned to high-growth industry segments and AI functions; valuation remains inexpensive, PL Capital says

(Reporting by Brijesh Patel in Bengaluru)

(([email protected]; Ph no. +91 9590227221;))

Updates

** Shares of Fractal Analytics FRAL.NS drop 4.2% to 861.9 rupees on their trading debut

** The Indian AI firm falls as much as 4.9%

** Stock debuted at 876 rupees vs IPO issue price of 900 rupees; valuing it at 150.67 billion rupees ($1.66 billion) vs targeted 154.8 billion rupees ($1.71 billion)

** Near-term enthusiasm appears tempered due to elevated valuations and volatility in global tech stocks - Shivani Nyati, Head of Wealth at Swastika Investmart

** FRAL's $312.5 million IPO hit full subscription only on the final day of bidding, with the retail and non-institutional portions under-subscribed

** Co to use net IPO proceeds of 9.59 billion rupees to invest in U.S. subsidiary, expand India presence, invest in R&D, and fund acquisitions

($1 = 90.6900 Indian rupees)

(Reporting by Nandan Mandayam in Bengaluru)

(([email protected]; Mobile: +91 9591011727;))