Capillary Technologies India Ltd — Q4 FY26 earnings call
Summary generated by AI from the official transcript Capillary Technologies India Ltd filed with BSE on 12 May 2026. Every statement cites a verbatim quote from that document — open any citation to read it. This is a record of what management said, not a recommendation. How we check these summaries
The short read
Capillary Technologies reported Q4 FY26 revenue growth of 26% year-on-year to Rs 191 crore, with adjusted EBITDA growing 28% year-on-year to Rs 35.7 crore, while full-year FY26 revenue grew 23% to Rs 734 crore with adjusted EBITDA of Rs 107 crore. Management discussed the completed acquisition of SessionM from Mastercard, a $35 million business closed on May 1, and outlined three growth levers (net retention rate, new customer wins, and M&A) alongside three profitability levers. The company also detailed progress on its AI product aiRA and reported a one-time exceptional income of Rs 25 crore in Q4 related to a churn indemnity clause from the Kognitiv acquisition.
1 statement from this call is not shown because its supporting quote could not be reproduced within our quoting limits. Nothing shown here is affected: every statement on this page carries its verified quote.
Numbers mentioned
Revenue: INR191 crores (Q4 FY26)
p. 8
“We ended Q4 at a healthy growth of 26% year-on-year on revenue versus last year at INR191 crores.”
Anant Choubey, page 8 of the filed PDF · View the filing
Adjusted EBITDA: INR35.7 crores (Q4 FY26)
p. 8
“Adjusted EBITDA saw another 28% year-on-year growth for the same time period at about INR35.7 crores.”
Anant Choubey, page 8 of the filed PDF · View the filing
PAT: INR43 crores (Q4 FY26)
p. 9
“And in terms of PAT, we stand at INR43 crores for the quarter.”
Anant Choubey, page 9 of the filed PDF · View the filing
Normalized PAT: INR19.6 crores (Q4 FY26)
p. 9
“If we normalize this, that's at about INR19.6 crores, and I'm going to take you in detail on what this normalization is over the next few slides.”
Anant Choubey, page 9 of the filed PDF · View the filing
Revenue: INR734 crores (FY26)
p. 9
“In terms of FY26, we ended the year at revenue of INR734 crores.”
Anant Choubey, page 9 of the filed PDF · View the filing
Adjusted EBITDA growth: 43% year-on-year (FY26)
p. 9
“At a 43% increase in adjusted EBITDA at about INR107 crores, and a normalized PAT for the year at about INR32 crores.”
Anant Choubey, page 9 of the filed PDF · View the filing
Net retention rate (overall): 110% (FY26)
p. 4
“If you look at our FY26 net retention rate, we had a 110% NRR for the full year.”
Aneesh Reddy, page 4 of the filed PDF · View the filing
Organic net retention rate: 114% (FY26)
p. 4
“So, organic expansion has been at 114% for the year, powered by three levers again.”
Aneesh Reddy, page 4 of the filed PDF · View the filing
Inorganic net retention rate: 94% (FY26)
p. 5
“On the inorganic side, our net retention rate for the year is 94%.”
Aneesh Reddy, page 5 of the filed PDF · View the filing
Run rate revenue: INR765 crores (end of FY26)
p. 9
“We ended the year at a run rate of INR765 crores.”
Anant Choubey, page 9 of the filed PDF · View the filing
New ACV: INR121 crores (FY26)
p. 9
“We have new ACV of INR121 crores, similar to that of last year.”
Anant Choubey, page 9 of the filed PDF · View the filing
Sales investment: 17% of top line (FY26)
p. 9
“And you would see that our sales investment is at about 17% of top line, which is best-in-class in the industry.”
Anant Choubey, page 9 of the filed PDF · View the filing
Operating cash flow: INR150 crores (FY26)
p. 10
“Now, this happens because we bill and collect money upfront in a healthy growing business.”
Anant Choubey, page 10 of the filed PDF · View the filing
Free cash flow to PAT: 200% (FY26)
p. 10
“So, a good KPI to look at over here is free cash flow to PAT. That's also at a very healthy number of 200%.”
Anant Choubey, page 10 of the filed PDF · View the filing
Cash return on invested capital: 22% (FY26)
p. 10
“And a more relevant term for a cash-generating business like ours is a cash return on invested capital, and this stands at 22%.”
Anant Choubey, page 10 of the filed PDF · View the filing
Exceptional income: INR25 crores (Q4 FY26)
p. 9
“Now, this exceptional income represents compensation received under a churn indemnity clause in the Kognitiv acquisition, which was triggered because seller failed to meet certain agreed commitments.”
Anant Choubey, page 9 of the filed PDF · View the filing
Q4 adjusted EBITDA margin: 19% (Q4 FY26)
p. 10
“So, our adjusted EBITDA margins for Q4 has been at about 19% and for the year stands at about 15%.”
Anant Choubey, page 10 of the filed PDF · View the filing
Headcount growth: 1% (FY26 vs prior year)
p. 15
“If you look at year-over-year headcount, we've grown 1% while revenue has grown 23%.”
Aneesh Reddy, page 15 of the filed PDF · View the filing
What management said it would do
A record of statements made on the call, in the words management used. Parakho does not forecast, endorse or assess them, and their presence here is not a view on whether they will happen.
Revenue — INR 1,000–1,050 crores · FY27
stated firmly by Aneesh Reddy
p. 12
“With the acquisition having closed, we are comfortable that revenues will cross INR 1,000–1,050 crores in FY27.”
Aneesh Reddy, page 12 of the filed PDF · View the filing
SessionM revenue run-rate contribution — 115 million in ARR as an entity · next 12 to 18 months
stated conditionally by Anant Choubey
p. 5
“We had spoken about this in the last call that this should take us to, you know, over the next 12 to 18 months, this will take us to 115 million in ARR as an entity.”
Anant Choubey, page 5 of the filed PDF · View the filing
SessionM EBITDA margin trajectory — significant margins by year three · year three
stated conditionally by Aneesh Reddy
p. 12
“The business should be at a break-even for year one and probably a little bit positive margins for year two.”
Aneesh Reddy, page 12 of the filed PDF · View the filing
Organic net retention rate target — 115% NRR
stated as an aspiration by Aneesh Reddy
p. 14
“Usually, the way we plan the business, Bharat, is about 115% NRR on the organic business.”
Aneesh Reddy, page 14 of the filed PDF · View the filing
Steady-state EBITDA margin — 25% to 30%
stated as an aspiration by Aneesh Reddy
p. 11
“So, net-net, this should be a 25% to 30% steady-state, probably more, EBITDA margin business.”
Aneesh Reddy, page 11 of the filed PDF · View the filing
SessionM annual EBITDA contribution — INR15 million type EBITDA · next few years
stated conditionally by Aneesh Reddy
p. 12
“SessionM should easily deliver about a INR15 million type EBITDA to the business over the next few years, annual EBITDA going forward.”
Aneesh Reddy, page 12 of the filed PDF · View the filing
Q1 margin — Q1 FY27
stated firmly by Anant Choubey
p. 11
“So, there is a bit of softness that happens in Q1, but what you see on a Q4 is a sustainable number going forward.”
Anant Choubey, page 11 of the filed PDF · View the filing
New organic customer additions — about 10% growth · next year
stated as an aspiration by Aneesh Reddy
p. 14
“I think next year you should assume something similar. So, about 10%?”
Aneesh Reddy, page 14 of the filed PDF · View the filing
Q&A highlights
Management's answers to analyst questions, in Parakho's words rather than a transcript. Each row names who answered and carries the verbatim quote it was drawn from.
Management said Q4 margins are sustainable, though percentage growth may look muted in FY27 due to the SessionM acquisition while absolute EBITDA continues to grow, targeting a 25-30% steady-state margin over time.
Answered by Anant Choubey
Asked by Disha Chordiya: How sustainable is the Q4 margin level and what is the steady-state margin?
p. 11
“So, if you look at the business, Disha, it's a run rate-driven business and high stickiness in terms of revenue. So, we expect these margin levels to continue.”
Anant Choubey, page 11 of the filed PDF · View the filing
Management said the deal was done at about 0.5x revenue, expects break-even in year one and positive margins in year two, with meaningful margin expansion by year three.
Answered by Aneesh Reddy
Asked by Disha Chordiya: What synergy benefits are expected from the SessionM acquisition and are more acquisitions planned?
p. 12
“In terms of synergies, we had spoken about this in the last call. The business should be at a break-even for year one and probably a little bit positive margins for year two.”
Aneesh Reddy, page 12 of the filed PDF · View the filing
Management explained that headcount stayed flat while costs rose due to expensive US sales hires, and that this investment will continue as the US business scales.
Answered by Aneesh Reddy
Asked by Bharat Gulati: Why hasn't headcount grown much despite significant cost growth in line with revenue?
p. 15
“If you look at year-over-year headcount, we've grown 1% while revenue has grown 23%. Now, what we have done is we have ramped up our sales teams in the US.”
Aneesh Reddy, page 15 of the filed PDF · View the filing
Management explained that acquired platforms typically had 5-10% margins due to underinvestment in technology, and Capillary migrates their customers to the Capillary platform to raise gross margins.
Answered by Aneesh Reddy
Asked by NGN Puranik: How does Capillary manage acquiring companies with strong IP but struggling margins?
p. 16
“So, and that's why what ends up happening is you get to a very good cohort of customers at some point in time, the business is delivering a 5%, 10% margins, the management, the founders of those companies are comfortable and they stop investing in tech and then they start falling back, right?”
Aneesh Reddy, page 16 of the filed PDF · View the filing
Management said most of the value comes from customer access, with smaller contributions from specific capabilities like consulting arms or rewards stacks gained through acquisitions.
Answered by Aneesh Reddy
Asked by NGN Puranik: What do acquired companies actually bring to Capillary beyond customer access?
p. 17
“Mostly like 90% of the value comes from the customer access. Right, so just given loyalty is a very sticky business, I think getting access to sticky long-term revenues is the biggest goal.”
Aneesh Reddy, page 17 of the filed PDF · View the filing
Risks flagged
Overall margin percentage growth may slow in the near term due to the newly acquired SessionM business initially carrying low margins
p. 11
“But I don't want to comment on what the future might be given the large acquisition that we've just done. So percentage growth might be a little slow, but the absolute number growth would continue.”
Anant Choubey, page 11 of the filed PDF · View the filing
Cost seasonality in Q1 due to annual salary increments
p. 11
“Now, you see a bit of increase in cost in Q1 given the salary increments happen in this quarter.”
Anant Choubey, page 11 of the filed PDF · View the filing
Not all revenue from acquired customers migrates to the Capillary platform, with churn during migration
p. 5
“During this upgrade, you tend to give them a discount, not everyone migrates, right?”
Anant Choubey, page 5 of the filed PDF · View the filing
Acquired platforms historically fell behind due to lack of continued technology investment
p. 16
“And most of these platforms aren't able to continue to invest that $10 million to $20 million every year to keep the platform going, right?”
Aneesh Reddy, page 16 of the filed PDF · View the filing
Tax expense will continue to be negative due to accumulated tax losses
p. 10
“If you look at the tax expense or credits that continues to be = negative and would continue to be negative given we have accumulated tax losses.”
Anant Choubey, page 10 of the filed PDF · View the filing
Generated by claude-sonnet-5. Source: the transcript as filed with BSE. We link to the exchange's copy; we do not host transcripts. Parakho is a data and screening tool, not an investment adviser — nothing here is a recommendation to buy, sell or hold.