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Rising AI pressure, weak Q3 performance weigh on Capillary shares

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Rising AI pressure, weak Q3 performance weigh on Capillary shares
ET Intelligence Group: The stock of Capillary Technologies India has lost 35% from its peak three months ago, including 15% drop since February 6 when it declared the December quarter performance. The company, which helps global clients improve customer engagement and rewards programmes through a software-as-a-service (SaaS) platform, faces the threat of revenue and profit contraction amid the rising capabilities of artificial intelligence (AI) models. Additionally, its muted December quarter performance, marked by a 30% fall in net profit amid higher depreciation and non-operating costs, failed to provide assurance to investors.

According to company management, AI-related disruptions will likely help in expanding its scope in the areas of analytics and campaign management. It also expects the impact of the AI shift to be limited as the company employs a ledger approach, which is deeply integrated with the client systems and involves high platform-switching costs.

Incorporated in 2012, the firm provides SaaS products and solutions to enterprises globally. Some of the brands that the company works with are Puma, Asics, Abbott Singapore, Domino’s, Indigo and United Colors of Benetton. North America is its biggest market, contributing 57% to revenue in FY25.

Capillary Bets on Differential Offering to Ride Out AI StormAgencies

Shares slide 35% amid AI fears and weak Q3 profit; management banks on ledger model, acquisitions to revive growth and margins

In the ledger approach, the data and the logic used while maintaining the information on loyalty points stays on the company’s software platforms thereby making the client interactions sticky. In addition, its pricing model is based on number of transactions and number of users and not on the number of call centre agents or salespersons – the latter approach is at a higher risk as AI automates these roles.
In a post-earnings call, the management highlighted that 60% of its costs are fixed. Hence, when the business is going strong, these costs grow at a slower pace than revenue, improving profitability. For Capillary, the operating margin before depreciation and amortisation (EBITDA margin) has gradually expanded to 13% in the first nine months of FY26 from FY23 when it had posted an operating loss.

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The company added 12 clients in the first nine months of FY26 and reported an order book of Rs 66 crore compared with Rs 53 crore in the year-ago period. As a part of its inorganic strategy, capillary tends to buy its competitors out, which helps in migrating the existing customers onto new products thereby reducing the risk of losing clients. On Tuesday, it acquired SessionM, a loyalty and rewards business from Mastercard for $20 million.
At Thursday’s closing price of ₹511, the stock was traded at nearly six times annualised nine-month revenue till December 2025. The recent fall in the stock price has reduced the price-sales (P/S) multiple from nearly 10 at the time of its IPO in November 2025. While the company has shown revenue traction, investors will keenly track the trend in profit and margin. In the short term, the stock is expected to stay under pressure and continue trading below its IPO price of ₹577 given the negative sentiment towards the technology sector.

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Coffee and ground beef prices surge most in 2 years, report finds

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Coffee and ground beef prices surge most in 2 years, report finds

Americans are facing a tale of two grocery lists.

While some prices are cooling, the items families rely on most for energy and nutrition — meat and coffee — are seeing sharp increases that wipe out any savings in the bread aisle.

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Fourteen of the 25 most common grocery store staples rose in price from February 2024 to February 2026, with the top five largest increases coming from coffee (+55%), lettuce (+39%), ground beef (+31%), sirloin steak (+21%) and orange juice (+15%), according to a new report from CouponFollow that analyzed Consumer Price Index (CPI) data from the past two years.

Coffee was the fastest-rising staple in the study, with a pound of ground roast costing $6.09 in 2024 compared to $9.46 in 2026. Going back to 2020, coffee prices have reportedly increased 123%.

JAMIE DIMON WARNS IRAN WAR COULD DRIVE INFLATION, INTEREST RATES HIGHER

Ground beef has hit $6.74 per pound, a 31% increase from 2024 and 74% above pre-pandemic levels.

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Customers shop for ground beef at grocery store

Customers shop for beef at a grocery store on April 6, 2026, in Los Angeles, California. (Getty Images)

With ground beef prices in mind, CouponFollow ran a “taco night test,” tracking specific meal scenarios to show how inflation affects consumers. A family of four is paying nearly $25 just for basic taco ingredients, compared to just $17.50 six years ago.

If you can live on eggs and toast, your bill might be lower than it was two years ago, with egg prices decreasing the most (-17%), followed by white bread (-8%), spaghetti (-8%) and butter (-7%).

Still, the report warns that “the items still climbing are rising fast enough to offset those declines.”

“Grocery inflation isn’t going away overnight, but small changes to how and where you shop can add up fast. Paying attention to which categories are rising and which are cooling, stocking up on pantry staples when prices dip, and being flexible with pricier proteins are all easy ways to stretch your grocery budget a little further,” CouponFollow notes. “Stacking those habits with coupons and deals can make an even bigger dent in your weekly bill.”

Economic experts have also recently cautioned that high oil prices due to the Iran war are pushing gasoline prices higher, and that could lead to grocery bills rising for American consumers.

The increase in oil, gas and diesel prices raises transportation costs for businesses, including grocery stores, which may face pressure to raise food prices and other items if the situation continues.

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“Every time something moves in the economy, it will cost more,” said Derek Reisfield, co-founder of MarketWatch and a former McKinsey consultant. “Someone, usually the end consumer, will have to pay for that.”

Gregory Daco, chief economist at EY-Parthenon, previously told FOX Business: “For U.S. consumers, what this means is that while there is currently a price shock at the pump being felt directly by consumers, there’s still uncertainty as to how long this shock will last.”

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FOX Business’ Eric Revell contributed to this report.

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SigmaRoc executives acquire shares through employee plan

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SigmaRoc executives acquire shares through employee plan

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Flowers Foods chief supply chain officer retiring

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Flowers Foods chief supply chain officer retiring

Search for successor to Tom Winters gets underway.

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Rainbow Rare Earths Limited 2026 Q2 – Results – Earnings Call Presentation (OTCMKTS:RBWRF) 2026-04-09

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OneWater Marine Inc. (ONEW) Q1 2026 Earnings Call Transcript

This article was written by

Seeking Alpha’s transcripts team is responsible for the development of all of our transcript-related projects. We currently publish thousands of quarterly earnings calls per quarter on our site and are continuing to grow and expand our coverage. The purpose of this profile is to allow us to share with our readers new transcript-related developments. Thanks, SA Transcripts Team

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U.S. Money Markets: Slow Calm To Steady State

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U.S. Money Markets: Slow Calm To Steady State

U.S. Money Markets: Slow Calm To Steady State

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Epam Systems stock hits 52-week low at $125.53

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Epam Systems stock hits 52-week low at $125.53

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BlackBerry earnings up next: All eyes on FY27 revenue outlook

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BlackBerry earnings up next: All eyes on FY27 revenue outlook

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The U.S. Tariff Shock In 2025 Vs. 2026 – Same Negative Impact, Different Drivers

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The U.S. Tariff Shock In 2025 Vs. 2026 - Same Negative Impact, Different Drivers

The U.S. Tariff Shock In 2025 Vs. 2026 – Same Negative Impact, Different Drivers

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Main Roads buys $59m Naval Base sites

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Main Roads buys $59m Naval Base sites

The two purchases in Naval Base are part of Main Roads’ plans to make way for the state’s $7.2 billion Westport project.

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American Airlines raises checked bag fees, trims economy perks amid soaring fuel prices

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American Airlines raises checked bag fees, trims economy perks amid soaring fuel prices


American Airlines raises checked bag fees, trims economy perks amid soaring fuel prices

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