Capillary Technologies India Limited

Technology — Software - Application · NSE

₹545.70+₹10.55 (+1.97%)

DalalBaazaar Score

60 / 100

🟢 Good

Verdict

CAUTION

Risk

Very High

Driven by high debt relative to equity, negative free cash flow, micro-cap size, which brings thin liquidity.

In simple words: The business is earning a fairly low return on the money invested in it, with both sales and profits growing well. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:00 pm

Understanding the Business

Company site ↗

The 60-second version of Capillary Technologies India Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Capillary Technologies India Limited provides AI-powered and cloud-based intelligent customer loyalty and engagement software-as-a-service software solutions for retail chain operators in the United States, the United Kingdom, and internationally.

IndustrySoftware - Application

SectorTechnology

Employees689

Annual revenue₹735 Cr

How does it make money?

Turns over ₹735 Cr a year. Of every ₹100 of sales, about ₹7 reaches shareholders as profit, with ₹14 left at the operating level before interest, tax and depreciation. Each of its 689 employees supports ₹1.07 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹1.07 Cr

Who are its competitors?

The closest listed comparisons in its industry are TATA CONSULTANCY SERV LT, INFOSYS LIMITED, HCL TECHNOLOGIES LTD, WIPRO LTD. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?Little sign of one

Returns on capital of 5.3% are at or below what the capital likely costs. That is the financial pattern of a business competing largely on price, where advantage has to come from execution rather than position.

Peer median ROE32.0%

What is the outlook?

3 analysts covering the stock expect revenue to grow about 7.5% and earnings to grow about 102.5% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+7.5%

Est. earnings growth+102.5%

Analysts3

What has been driving growth?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved +188% while net margin moved -121% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+188%

Margin effect-121%

DalalBaazaar Score

60/ 100

Good

Weighted across six categories. Every point is explained below.

✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ High leverage magnifies any downturn in earnings
✗ Profits have swung sharply from year to year — earnings are hard to forecast
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

65/ 100

Good

How good the business is, ignoring the share price entirely.

Valuation

45/ 100

Fair

What you are being asked to pay, ignoring how good the business is.

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

103.4x

1.1Y Median

305.6x

13 monthly readings · mean 254.3x · range 71.9x–402.0x

Sector Median

16.5x

median of 4 sector peers

🟢Current valuation is approximately 66% below its 1.1y median of 305.6x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

⚠️Against its sector it trades 525% above the peer median of 16.5x.

vs. its own history

Cheap

305.6x median over 13 months · -66%

vs. sector peers

Expensive

16.5x median of 4 peers · +525%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

42.0x

PEG

—

What's Good / What's Bad

🟢 What's Going Well4

Margins are improving
EBITDA margin is up from -22.1% to 14.2% over 3 years.
Debt is being paid down
Total debt is down 64% over 3 years.
Return on equity is rising
ROE has improved from -47.0% to 5.1%.
Return on capital is rising
ROCE has improved from -34.9% to 5.3%.

🔴 What Needs Attention0

Nothing stands out as clearly deteriorating on the years of data available.

Red Flags

2 items require attention · 1 high · 1 watch

🔴High leverageFinancial
Debt/Equity of 5.24x — earnings must service borrowings before shareholders see anything.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹213 Cr in the latest year.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from -22.1% to 14.2%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Deleveraging frees up earnings
Debt is down 64% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.
Priced below its own history
The stock trades 66% below its own median multiple. If the business performs as it has and simply re-rates back to normal, that gap is return on its own.

🔴 Bear CaseWhat could go wrong?

Leverage amplifies any setback
Debt/Equity of 5.24x. Interest is payable whether or not the business has a good year.
A premium to the sector to defend
It trades 525% above the peer median. That premium needs a reason that persists, or it closes.
Earnings are hard to forecast
Profit has swung sharply from year to year, so any single year — good or bad — is a weak guide to the next. Cyclical earnings deserve lower multiples for that reason.
Size brings its own risk
Micro Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1Revenue growth stays above 32% a year✓ 42.2% CAGR
Latest reported year was 42.7%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 12%✓ 14.2%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹213 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.5x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 8%✗ 5.3%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

6 / 12 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✗ Generates positive free cash flow
✗ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✓ Profit growing year-over-year
✗ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✓ Short-term technical trend isn't bearish

Price history

Quick Metrics

3 good · 3 neutral · 5 weak

Market Cap

₹4,343 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

103.4x

Expensive

Expensive — verify against sector peers

P/B Ratio

4.23x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹5.28

Profitable

Profitable on a per-share basis

ROE

5.1%

Weak

Weak capital efficiency

ROCE

5.3%

Weak

Low return on total capital employed

Debt/Equity

5.24x

High

High leverage

Revenue Growth (YoY)

42.7%

Healthy

Healthy top-line growth

Profit Growth (YoY)

294.5%

Healthy

Profits growing at a healthy clip

Dividend Yield

None

No dividend yield reported — usually means no payout, but verify if one was recently initiated

Free Cash Flow

-₹213 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

P/E (Forward)

25.6x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

10.1%

Average

Average margins

Net Margin

5.2%

Average

Average bottom-line conversion

Current Ratio

2.80

Comfortable

Healthy short-term liquidity

52W Range Position

30%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

555.2 / 522.1

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

35.4

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹255 Cr	₹525 Cr	₹598 Cr	₹735 Cr	+42.2%
EBITDA	-₹56 Cr	-₹3 Cr	₹72 Cr	₹104 Cr	—
EBITDA Margin	-22.1%	-0.5%	12.0%	14.2%	—
PAT (Net Profit)	-₹88 Cr	-₹59 Cr	₹13 Cr	₹52 Cr	—
EPS	₹-11.06	₹-7.49	₹1.67	₹6.87	—
ROE	-47.0%	-11.0%	2.3%	5.1%	—
ROCE	-34.9%	-10.4%	3.0%	5.3%	—
Total Debt	₹149 Cr	₹80 Cr	₹106 Cr	₹54 Cr	-29.0%
Free Cash Flow	-₹48 Cr	₹60 Cr	-₹94 Cr	-₹213 Cr	—

🟢 Revenue has grown at 42.2% a year over 3 years.

🟢 EBITDA has turned positive, from -₹56 Cr to ₹104 Cr.

🟢 EBITDA Margin has risen from -22.1% to 14.2% over 3 years (+36.2 pts).

🟢 PAT (Net Profit) has turned positive, from -₹88 Cr to ₹52 Cr.

🟢 EPS has turned positive, from ₹-11.06 to ₹6.87.

🟢 ROE has risen from -47.0% to 5.1% over 3 years (+52.1 pts).

🟢 ROCE has risen from -34.9% to 5.3% over 3 years (+40.2 pts).

🟢 Total Debt has shrunk at 29.0% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹1,300 Cr

Total Liabilities

₹277 Cr

Cash & Equivalents

₹28 Cr

Operating Cash Flow

₹150 Cr

Capex

-₹363 Cr

Shareholding (proxy)

Institutional Holding

18.5%

Insider Holding

63.9%

Analyst Consensus

Recommendations

3 Buy · 0 Hold · 0 Sell

Target Price (Mean)

₹681.67

+24.9% vs CMP

Target Range

₹645 – ₹700

Peer Comparison

Company	P/E	ROE
TATA CONSULTANCY SERV LT	17.3x	45.6%
INFOSYS LIMITED	15.8x	32.0%
HCL TECHNOLOGIES LTD	20.4x	24.6%
WIPRO LTD	14.5x	15.9%

Recent News

3 mixed3 general

Analysts Have Made A Financial Statement On Capillary Technologies India Limited's (NSE:CAPILLARY) First-Quarter Report

Simply Wall Street, 07 AugAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Capillary Technologies India Ltd Shows Signs of Mild Bullish Momentum Amid Technical Shift

MarketsMojo, 15 OctAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Capillary Technologies India Share Price: Buy or Sell

Univest, 11 Sept

CAPILLARY Stock Price and Chart — NSE:CAPILLARY

TradingView, 14 Dec

Capillary Technologies India reports consolidated net loss of Rs 9.55 crore in the June 2026 quarter

Business Standard, 04 AugResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

CAPILLARY TECHNO INDIA L Share Price

Upstox, 05 May

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

StrongGrowth

MiddlingBusiness Quality · Financial Health · Profitability · Valuation

WeakRisk

Points for each in the Score ↑

Good business at a fair price

A sound business at a reasonable valuation. Suitable for a long-term holding, with the valuation and the direction of margins worth watching rather than the business itself. 1 high-severity red flag sits above this conclusion and should be read first.

2 of 5 tripwires tripped — Free cash flow remains positive; ROCE stays above 8% · see Key things to watch ↑