Capillary Technologies India Limited has issued a regulatory clarification regarding the exercise price mechanism under its Employee Stock Option Plan (ESOP) 2021 scheme. The clarification, dated February 24, 2026, addresses feedback received from proxy advisors concerning the company's postal ballot notice issued on February 06, 2026.

Proxy Advisor Concerns Addressed

The company received feedback from proxy advisors highlighting concerns about the lack of clarity regarding the exercise price determination. The advisors noted that the exercise price could range between face value and market price, potentially allowing significant discounts to prevailing market prices.

Company's Pricing Mechanism Clarification

In response to these concerns, Capillary Technologies provided detailed clarification on its ESOP pricing structure:

The company emphasized that this pricing mechanism is "objective, market-linked and transparent, and does not permit arbitrary pricing." The structure is designed to ensure continued alignment of employee incentives with long-term shareholder value creation.

Regulatory Compliance and Governance

Capillary Technologies confirmed that ESOP 2021 is implemented in strict accordance with:

• Companies Act, 2013
• SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021
• Supervision of the Nomination and Remuneration Committee

The company noted that extending ESOP benefits to subsidiary employees is a standard practice for listed groups, aimed at retention of critical talent and value creation at a consolidated level.

Postal Ballot Context

The clarification relates to Special Resolution No. 1 in the postal ballot notice, which seeks shareholder approval for ratification of extension of benefits under ESOP 2021 to employees of subsidiary companies, whether in India or overseas. The additional information has been made available on the company's website to provide shareholders with enhanced clarity before voting.

The clarification was signed by Gireddy Bhargavi Reddy, Company Secretary and Compliance Officer, and filed with both BSE Limited and National Stock Exchange of India Limited as required under Regulation 30 of SEBI listing regulations.

Capillary Technologies India Limited conducted its Q3 FY26 earnings conference call on February 06, 2026, presenting strong financial results and strategic updates to analysts and investors. The company, a global leader in loyalty and customer engagement platforms, demonstrated continued growth momentum across key financial metrics.

Financial Performance Highlights

The company delivered robust financial results for both the quarter and nine-month periods ending December 31, 2025.

For the nine-month period, revenue reached INR 543 crores, marking 22% year-on-year growth. Adjusted EBITDA for nine months stood at INR 71 crores, representing significant 53% growth compared to the previous year.

Key Business Metrics and Growth Drivers

Capillary Technologies maintained strong operational metrics that underpin its growth strategy. The company's net retention rate (NRR) for the trailing twelve months reached 111%, with organic business achieving an impressive 115% NRR. This places the company in the top 10 percentile of global SaaS companies.

The company added 12 new customers during the nine-month period, including three in the last quarter. Management outlined three key growth axes: net retention rate expansion from existing customers, new customer acquisitions, and strategic acquisitions of competitors.

Market Leadership and Product Innovation

Capillary Technologies reinforced its market-leading position through recognition in the latest Forrester Wave report for loyalty management platforms, released in December 2025. The company achieved the highest rating among 14-15 vendors, scoring 5 out of 5 on 22 of 27 evaluation criteria.

The company's AI-powered product, aiRA (AI-powered Research Assistant), continues gaining traction with customers. Management reported that 10-15 of their 115 customers are currently in proof-of-concept or post-POC phases with aiRA. The AI solution enables conversational analytics, campaign management, and customer support automation.

Profitability and Cash Generation

Despite strong EBITDA growth, PAT declined to INR 8 crores in Q3 FY26 from INR 11.4 crores in the previous year, primarily due to one-time expenses including INR 1.6 crores in gratuity costs and INR 2 crores in IPO-related expenses. Normalizing for these items, PAT remained flat year-on-year.

The company's depreciation and amortization increased to INR 19 crores from INR 13 crores, largely due to the Kognitiv acquisition completed in May 2025.

Strategic Outlook and Market Position

Management emphasized their competitive advantages in the loyalty management space, particularly against agency-based competitors. The company serves 410 brands across 115 customers, including 20 Fortune 500 companies, with operations spanning 47 countries. Their platform manages 1.8 billion consumer profiles with enterprise-grade uptime of five nines.

Looking ahead, Capillary Technologies continues focusing on expanding existing customer relationships, winning new enterprise clients, and integrating acquired platforms to drive margin expansion. The company's subscription-based model with long-term contracts provides revenue visibility and supports sustained growth.

Source: Capillary Technologies India Limited Q3 FY26 Earnings Conference Call Transcript