Capillary Technologies India has faced significant market pressure, with its share price retreating **35%** from its post-listing highs. As of late February 2026, the stock is trading near **₹518**, reflecting investor caution despite the company’s recent entry into the public markets in November 2025. The downturn follows a mixed performance in the third quarter of fiscal year 2026. While consolidated revenue grew **16%** year-on-year to **₹184 crore**, net profit for the quarter declined **30%** to **₹8 crore**. This dip was largely attributed to **₹2 crore** in IPO-related costs and higher depreciation following the acquisition of Kognitiv. **Financial Indicators** * **9-Month Revenue:** **₹543 crore**, a **22%** increase. * **Adjusted EBITDA:** **₹71 crore**, up **53%** year-on-year. * **Net Retention Rate:** A robust **111%**, placing it in the top tier of global SaaS firms. * **Order Book:** New additions totaled **₹66 crore** over the last nine months. The market remains focused on the "AI threat" to traditional SaaS models. Investors are weighing whether generative AI will commoditize customer engagement or if Capillary can successfully pivot. Currently, **10 to 15** of the company’s **115** enterprise customers are testing its AI-powered research assistant, aiRA. Management is leaning into AI-led productivity, aiming to automate complex migration tasks and campaign management. However, the lack of explicit forward-looking guidance has left a vacuum for speculation regarding long-term margin stability. **Strategic Moves** To counter growth concerns, the company is deploying its **₹877 crore** IPO proceeds toward inorganic expansion. It recently acquired SessionM from Mastercard and Kognitiv’s loyalty business to strengthen its footprint in North America and West Asia. The stock currently trades at approximately **6 times** its annualized nine-month revenue. While operational efficiency is improving—evidenced by a **16.4%** EBITDA margin—the transition to an "AI-first" platform remains the central pivot point for future valuation recovery.