AI-generated · cited to primary sources · not investment advice
Capillary Tech. (544614) Feb 2026 Filing Analysis
Does management do what it says?
Management intends to continue investing in AI and product migration tools to improve win rates and customer onboarding efficiency. — target: Continuous investment
“So, as Aneesh spoke about, some of the product investments that we've been doing on AI stuff... So that's an investment that we would continue to make. The other is investment that we've been doing towards the product for migration of customers... So those investments would continue.”
Management targets a long-term organic annual growth rate of 20% or more. — target: 20%+
“ORGANIC BUSINESS - Customers on Capillary platform 20%+ Organic Annual Growth Rate”
Management aims to migrate acquired customers to the Capillary platform to increase gross margins from ~30% to ~65%. — target: ~65%
“Post integration with our platform customers move from a ~30% gross margin to a ~65% margin, leading to better profitability and cash flow generation, making our M&A a 4 -5 year cash pay back engine.”
Management targets approximately 75% revenue retention through the integration of acquired businesses. — target: ~75%
“~75% Revenue Retention through integration”
The company plans to continue its M&A strategy of acquiring competitors at 0.5x to 1.5x revenue and migrating them to the Capillary platform to improve margins. — target: 0.5x to 1.5x revenue (+1 more commitment)
“In the initial post-acquisition period, we will integrate approximately 60 customers from the two acquisitions onto our platform... The integrations will be done over the next 24-36 months with an estimated completion by the end of CY 2028.”
See the full cited Management analysis of Capillary Tech.
How durable is the business?
The AI moat is evolving from a differentiator to a monetization engine. The aiRA product is currently in the 'Proof of Concept' (POC) stage with 10-15 customers, with plans to transition to paid annual licenses after 3-month free pilots. (1 expanding)
“We at least have out of our 115 customers today we at least have 10 or 15 who are in a POC or a post-POC type place with aiRA now.”
The organic business is expanding with a Net Retention Rate (NRR) of 115%, placing it in the top 10th percentile of global SaaS companies. This growth is driven by platform overages, upgrades to advanced stacks like Engage+ and aiRA, and expansion into new geographies by existing multinational clients. (1 expanding)
“If we break this down into organic and inorganic business, the organic business NRR is at 115%. And at this number, Capillary would be in the top 10 percentile of the global SaaS companies.”
The company is reinforcing its AI-first moat through its 'AIRA-powered' architecture, which is now a central part of its independent recognition as a market leader. (1 expanding)
“Validation of our AIRA-powered architecture delivering predictive insights and automated personalization at scale.”
North America's revenue share is expanding from 55% to approximately 59% following the Session M acquisition, which derives 70% of its revenue from the Americas. (1 expanding)
“North America (~59%); access to other geos such as LATAM”
The moat remains strong and is being further defended by the 'System of Record' positioning. Management likens their loyalty points ledger to a bank ledger, holding approximately INR 1,000 crores of 'currency' (points) which makes the platform mission-critical and difficult to replace. (1 stable, 1 expanding across 1 engine)
“~$35M Continued ARR... access to $35Mn+ revenue”
See the full cited Business Model analysis of Capillary Tech.
Where does growth come from?
Customer count is accelerating through M&A, jumping from 110+ to 150+ following the Session M deal, including a 25% increase in Fortune 500 clients. (1 accelerating across 1 signal)
“150+ Customers... 25 Fortune 500 Companies (Combined)”
The new order book is showing accelerating growth, increasing from INR 53 crores to INR 66 crores for the nine-month period compared to the previous year. (2 accelerating, 1 new trend across 3 signals)
“Projected FY30 Adjusted EBIDTA ~₹398 Cr”
ARR growth is steady and visible, showing a 21% increase over the 9-month period ending December 2025 compared to March 2025. (2 steady, 1 new trend across 3 signals)
“~115M+ Combined ARR... $82M ARR [Capillary] + ~$35M Continued ARR [Session M]”
Capillary is launching 'aiRA', an AI-powered assistant that automates complex data analysis and marketing tasks, serving as a major competitive differentiator. (+1 more signal)
“And finally, we have an AI product which runs across all our products, we call it aiRA, short for AI-powered Research Assistant. Helps you do a bunch of things”
Organic NRR remains highly robust at 115%, placing the company in the top 10th percentile of global SaaS firms, though the overall blended NRR is slightly lower at 111% due to inorganic migrations. (2 steady across 2 signals)
“the split of this 111%, 115% just the organic customers, which is customers who are on the Capillary platform... That set is today at 115% organic expansion.”
See the full cited Future Growth analysis of Capillary Tech.
What could break the thesis?
The risk remains stable as management continues the sunsetting process; they successfully sunset one of the Brierley platforms this quarter, demonstrating progress in the multi-year migration cycle. (2 stable, 1 high-severity)
“In the initial post-acquisition period, we will integrate approximately 60 customers from the two acquisitions onto our platform... The integrations will be done over the next 24-36 months”
The risk is intensifying as D&A rose from INR 13 crores to INR 19 crores per quarter, primarily due to the Kognitiv acquisition, which is limiting the expansion of EBIT margins despite EBITDA growth. (1 intensifying)
“Post integration with our platform customers move from a ~30% gross margin to a ~65% margin”
The acquisition of Session M intensifies geographic concentration, as Session M derives 70% of its revenue from the Americas, pushing the combined entity's North American exposure to ~59%. (1 intensifying)
“The depreciation and amortization has increased from about INR 13 crores a quarter to about INR 19 crores and this is largely on back of the acquisition that we did earlier this year, we acquired company called Kognitiv”
The risk is stable with inorganic NRR at 96%, indicating some contraction as expected during migrations, while organic NRR remains very strong at 115%. (2 stable)
“For the inorganic business, as Aneesh was talking, we see some contraction as we migrate customers over to Capillary platform, so we saw an NRR of about 96% on the inorganic business.”
The risk is stable; while the payback period remains long, the company reported a strong closing cash balance of INR 463 crores and high operating cash flow generation (142% of adjusted EBITDA this quarter). (2 stable)
“making our M&A a 4 -5 year cash pay back engine.”
See the full cited Risk analysis of Capillary Tech.
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