Summary
Seshaasai Technologies Limited - Q3 FY26 Earnings Call Summary Friday, January 30, 2026, 4:00 PM IST
Event Participants
Executives 3 Gautam Jain (Whole-Time Director), Pavan Kumar (Chief Financial Officer), Pragnyat Lalwani (Chairman and Managing Director)
Analysts 5 Chintan Shah (JM Financial), Devesh Agarwal (IIFL Capital), Jay Patwa (Vani Financial), Nidhesh (Investec), Vedanta Agarwal (IIFL Capital)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Revenue | ₹374 crores | +10.1% YoY, +6.1% QoQ; driven by payment solutions scale and steady IoT contribution. |
| EBITDA | ₹100.7 crores | +24.6% YoY (approx.); margins expanded +316 bps YoY to 26.95%. |
| PAT | ₹64.08 crores | +19.3% YoY; margins at 17.15%, supported by lower finance costs and scale. |
| Gross Margin | 43% - 45% (Range) | Driven by favorable product mix, internal inlay manufacturing, and lower raw material (paper/chips) costs. |
| Cash & Equivalents | ₹387 crores | Strong liquidity position following IPO; ₹300 crores total debt repaid to date. |
| Order Pipeline | ₹699 crores | Combined multi-year contract potential from new PSU/Govt tender wins. |
Geographic & Segment Commentary
- Payment Solutions: Contributed 53% of revenue (₹198 crores in Q3); growth driven by new card personlization contracts with 4 PSU banks. Secured tender wins with potential value of ₹489 crores over contract periods. Focus shifting toward high-value metal cards and transit-led interoperable cards for metros.
- Communication & Fulfilment: Contributed 36.4% of revenue; remains stable with significant focus on identity-led programs (PAN/Citizen IDs) and integrated logistics platforms. Secured ₹210 crores in multi-year contracts this quarter. Growth is supported by vendor consolidation at large enterprises seeking cyber-security and GST compliance.
- IoT Solutions: Contributed 10.3% of revenue (₹38.5 crores); grew 100% YoY. Successfully onboarded a major Indian retail giant (19,000+ stores) for RFID rollout. Strategic focus on “full-stack” offerings including custom inlay design, chip bonding, and middleware software.
Company-Specific & Strategic Commentary
- Capacity Expansion: Currently has 200,000 sq. ft. under construction across Bengaluru, Nagpur, Navi Mumbai, and Kundli to support future demand.
- Technology & IP: Filed 6 new patents in the last 9 months; aligning partnerships for advanced product authentication and anti-counterfeiting.
- New Product Verticals: Commenced supplies of Telecom SIM cards in Q3; awaiting GSMA SAS certification (expected Feb 2026) to scale the eSIM business.
- Operational Integration: Investing in Alomind Labs to mature sensor-based traceability products (data loggers) for cold chain and pharma logistics.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Revenue Seasonality | Stronger Q4 Performance | Management expects historical trend of H2/Q4 being the strongest period to continue in FY26. |
| Gross Margins | 43% - 45% (Sustainable) | Confidence based on operational efficiencies and in-house component manufacturing, despite FX volatility. |
| Metal Card Contribution | Incremental Growth in FY27 | High expectations for revenue accretion from premium card segments as banks move from PVC to metal. |
Risks & Constraints
| Risk | Context |
|---|---|
| Currency Volatility | 37-38% of costs are USD-denominated (imports of chips/materials); further Rupee depreciation may pressure margins. |
| Supply Chain | Potential “tightness” in semiconductor supplies noted by management; requires proactive planning to avoid disruption. |
| Volume/Price Mix | Recent revenue declines in Payment Solutions (9M FY26) attributed to volume rationalization and marginal price corrections. |
Q&A Highlights
Segment Dynamics & Margins
- Question: What is driving the EBITDA growth and gross margin expansion? (Devesh Agarwal)
- Answer: Favorable product mix, operational scale, and lower procurement costs for paper and chips. In-house manufacturing of IoT inlays also contributes significantly (Pavan Kumar).
- Question: Why did Payment Solutions revenue decline YoY? (Devesh Agarwal)
- Answer: Primarily due to volume reduction and some marginal price corrections from select customers, though QoQ trends are improving (Pragnyat Lalwani).
IoT & Future Growth
- Question: What is the moat in the IoT vertical against competitors? (Jay Patwa)
- Answer: Seshaasai offers a “full-stack” solution: proprietary inlay design, chip bonding, multi-locational secure infrastructure, and integration software platforms (Pragnyat Lalwani).
- Question: How large can the new retail giant contract be? (Chintan Shah)
- Answer: Once fully allocated, it is expected to be the company’s largest single account; clarity on specific volumes expected by next call (Pragnyat Lalwani).
New Technology & Metal Cards
- Question: Is the shift to metal cards gaining traction? (Devesh Agarwal)
- Answer: Strong order book for Q4; currently discussing metal card projects with three government banks, which is a significant shift from previous PVC-only demands (Pragnyat Lalwani).
Key Takeaway
Seshaasai Technologies delivered a solid Q3 FY26, characterized by significant margin expansion and a pivot toward high-value technology segments. Revenue reached ₹374 crores (+10.1% YoY), while EBITDA margins improved to 26.95% due to internal efficiencies and a move toward in-house IoT component manufacturing. Strategically, the company secured major multi-year contracts totaling nearly ₹700 crores in potential value across Payment and Communication segments, including a landmark RFID win with a major Indian retail giant. While legacy segments like insurance communication are rationalizing due to digitization, growth is being backfilled by sophisticated identity solutions and premium payment form factors like metal cards. Management maintains a positive outlook for Q4 FY26 based on seasonal strengths and expects the burgeoning IoT and eSIM businesses to drive diversification in FY27. Tight monitoring of dollar-denominated import costs remains critical as the company executes its 200,000 sq. ft. capacity expansion plan.
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