capillary technologies reported a consolidated net profit of ₹523.88 million for the financial year ended March 31, 2026, a substantial increase from ₹132.80 million in the previous year. The company’s consolidated revenue from operations rose 23% to ₹7,345.99 million, up from ₹5,982.59 million in FY25. This growth was driven by strong organic performance, with new annual contract value (ACV) closing at ₹1,214.00 million, reflecting a 35% growth over FY25 excluding one large healthcare client. The company also completed its Initial Public Offering (IPO) during the year, raising ₹8,775.01 million, which bolstered its cash position to approximately ₹4,830.00 million as of March 31, 2026.

The financial results were filed pursuant to Regulation 34(1) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Walker Chandiok & Co LLP served as the statutory auditor, issuing an unmodified opinion on both standalone and consolidated financial statements. The Board of Directors did not propose any dividend for FY26. The company’s standalone revenue increased to ₹2,118.90 million from ₹1,740.91 million, while standalone net profit decreased slightly to ₹28.90 million from ₹35.06 million, primarily due to higher employee benefit expenses and depreciation charges associated with recent acquisitions.

Financial Performance Highlights

The company demonstrated strong operating leverage, with adjusted EBITDA growing 43% year-on-year to ₹1,069.00 million. Adjusted EBITDA margins expanded to 14.6% from 12.5% in the prior year. The growth strategy focused on three engines: winning new customers, expanding within existing accounts, and strategic acquisitions. Net revenue retention stood at 114% organically, indicating healthy expansion within the existing customer base. Customer acquisition cost (CAC) as a percentage of ACV improved to 16.9% from 17.9% in FY25.

Strategic Acquisitions and Growth

Capillary Technologies continued its acquisition-led growth strategy, completing five acquisitions since 2021. During FY26, the company acquired Kognitiv Solutions Inc., strengthening its presence in North America and adding enterprise-grade loyalty SaaS capabilities. This acquisition contributed to the increase in goodwill to ₹3,095.76 million and other intangible assets to ₹1,385.57 million on the consolidated balance sheet. The company also entered the Latin American market through its first customer win in the region. Management highlighted that acquired businesses have historically turned around from loss-making to generating 35-40% contribution margins within three years of integration.

What the Numbers Show

A key observation from the financial data is the divergence between standalone and consolidated profitability. While consolidated net profit surged nearly threefold, standalone net profit declined by 18%. This discrepancy is largely attributable to the impact of acquisitions, which increased depreciation and amortization expenses significantly. The consolidated EBITDA margin expansion to 14.6% contrasts with the standalone focus on cost discipline, where indirect costs grew only 14% against 23% revenue growth. This suggests that while the core Indian entity maintains operational efficiency, the group-level profitability is currently being shaped by the integration costs and amortization of recent acquisitions like Kognitiv. The strong cash position of ₹4,830.00 million provides ample liquidity for future integrations and potential further strategic buys.

Capillary Technologies India has initiated a forensic audit to investigate suspected fraudulent banking transactions. The audit has been assigned to KPMG Assurance and Consulting Services LLP, a prominent professional services firm, underscoring the seriousness with which the company is approaching the matter.

Forensic Audit Details

The key details of the forensic audit are outlined below:

Corporate Governance Action

The initiation of a forensic audit by an independent and reputed firm such as KPMG Assurance and Consulting Services LLP reflects the company's commitment to transparency and accountability. Forensic audits of this nature are typically undertaken to examine financial records, identify irregularities, and determine the extent of any potential misconduct in banking transactions. The findings of such an audit are expected to provide clarity on the suspected fraudulent activities under review.