Capillary Technologies swings to Rs 21.9 crore profit as revenue jumps 51%

Capillary Technologies India, a software-as-a-service (SaaS) company, reported a consolidated profit after tax of about Rs 21.9 crore for the July-September quarter of 2026 (Q2 of financial year 2026-27), against Rs 29 lakh in the same quarter a year earlier, in results released on Monday, November 2, 2026. Revenue from operations rose about 51 per cent year on year to Rs 271.4 crore, from Rs 179.3 crore. The quarter's profit followed a loss after tax of Rs 9.55 crore in April-June 2026.

Capillary is an India-based software company that earns almost all its money from subscriptions and whose shares trade on the stock market. For investors and founders, its results are a test of a question the Indian start-up world has argued about for years: can a SaaS company built in India grow fast and also make money?

This quarter suggests it can, at least for now. Revenue grew by half in a year, and the company's own figures show that the bigger part of that growth was real business rather than currency gains, since growth in constant currency was still about 43 per cent. The company has also said that SessionM, a business it acquired, broke even in the quarter, which helped lift recurring revenue.

Because subscriptions make up about 95 per cent of revenue, most of Capillary's income repeats every year as long as customers renew. That is why investors in SaaS companies watch ARR closely: it shows how much revenue the company can expect over the next twelve months before it signs a single new customer.

There are still points to watch. The profit came only one quarter after a loss, so a single quarter does not yet make a trend. Growth that relies partly on an acquisition can slow once that deal is fully counted in last year's numbers. Reports also noted a change of auditor at the same board meeting.

Peepals calculation: Capillary kept about Rs 8 of profit for every Rs 100 of revenue in the quarter (21.9 ÷ 271.4 ≈ 8.1 per cent). If the market value of about Rs 4,023 crore reported at a share price of Rs 504 is set against ARR of about Rs 1,085 crore, investors were valuing the company at about 3.7 times its recurring revenue (4,023 ÷ 1,085). With revenue about 6 per cent above the first quarter, April-June revenue works out to roughly Rs 256 crore (271.4 ÷ 1.06), so the first half of the year brought in about Rs 527 crore, close to half of the Rs 1,065 crore full-year guidance. Our calculation from the reported figures.

Short-term: The return to profit and the 51 per cent growth give Capillary a stronger case with customers and investors, though the share price reaction on the day was reported as modest.

Long-term: If growth holds and the acquired business keeps adding to profit, Capillary could show that an Indian SaaS company can grow quickly while staying profitable, which matters for other software start-ups planning to list.

Who is affected: Capillary's shareholders, employees and business customers, investors in Indian software start-ups, and SaaS founders who are measured against listed peers.

What to watch next: Whether the company meets its FY27 guidance of Rs 1,065 crore in revenue and Rs 172 crore in adjusted EBITDA.

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