Capillary Technologies India Limited announced robust financial results for the second quarter of FY27, reporting a 51% year-on-year growth in revenue to INR 271 crore. The company also achieved a substantial increase in adjusted EBITDA to INR 44.8 crore, more than doubling from the previous year. Annual Recurring Revenue (ARR) saw a 51% surge to INR 1085 crore, reflecting strong customer acquisition and retention, particularly driven by the AI-powered aiRA platform and contributions from recent acquisitions.
Capillary Technologies India Limited Q2 FY27 Earnings Highlights
Capillary Technologies India Limited has announced its financial results for the second quarter and first half of fiscal year 2027 (Q2 FY27), ending September 30, 2026. The company demonstrated significant growth across key financial metrics.
Q2 FY27 Performance
For the quarter, Capillary Technologies reported revenue of INR 271 crore, marking a 51% increase year-on-year and a 43% increase on a constant currency basis. Adjusted EBITDA for the quarter stood at INR 44.8 crore, more than doubling year-on-year and representing a 17% margin on the top line. Profit After Tax (PAT) for Q2 FY27 was INR 22 crore, approximately 8% of the revenue.
H1 FY27 Performance
In the first half of FY27, revenue reached INR 528 crore, a 47% year-on-year growth (38% on a constant currency basis). Adjusted EBITDA for H1 FY27 was INR 89 crore, with a 17% margin. PAT for H1 FY27 was INR 12 crore, representing a 2% margin.
Organic and Inorganic Growth
The company highlighted a strong performance driven by both organic and inorganic contributions. Organic business grew by 23%, while inorganic business more than doubled, largely due to the Session M acquisition. This contributed to a significant increase in adjusted EBITDA, which grew from INR 41 crore to INR 89 crore.
Annual Recurring Revenue (ARR)
Annual Recurring Revenue (ARR) continues to be a key indicator, showing a substantial 51% growth year-on-year. For Q2 FY26, ARR was INR 717 crore, growing to INR 765 crore in FY26, and reaching INR 1085 crore by Q2 FY27.
Customer Acquisition and Retention
New ACV (Annual Contract Value) also saw significant growth, with an increase of 79% year-on-year. This is attributed to the company’s AI capabilities and its differentiated product offering. The acquisition of Session M has been integrated, and the company is seeing positive contributions, with efforts to improve its gross margins through platform migration and cost optimization.
Profitability Levers
The company’s profitability is supported by three main levers: Net Retention Rate (NRR) expansion, new customer wins, and inorganic growth (M&A). NRR expansion was around 116% organically in Q2 FY27. Profitability is further enhanced by leveraging non-cost (non-cogs) operating leverage, where costs grow at a slower pace than revenue.
Session M Integration
The Session M acquisition is being integrated into Capillary’s platform, with customers gradually migrating. The company expects to see benefits from improved gross margins as Session M customers move to the Capillary platform, aiming to bring Session M’s gross margins closer to Capillary’s industry-leading levels. Efforts are underway to optimize server costs and operational efficiency within the acquired business.
aiRA Platform Expansion
The aiRA platform is expanding its capabilities to include acquisition channels like Google Ads, Meta, and TikTok. This provides a unified view of customer funnel from acquisition to retention and loyalty, further differentiating Capillary’s offering.
Cash Position and Outlook
Capillary Technologies maintains a strong cash balance of INR 573 crore with zero long-term debt. Operating cash flow stands at INR 113 crore for the half-year. The company is optimistic about its future growth trajectory, expecting to meet or exceed its guidance for the year, driven by strong momentum in its AI offerings and acquisition integration.
Source: BSE
