STYL

Seshaasai Technologies reported a robust Q3 FY26, with total revenue reaching INR 374 crores, marking a 6.1% sequential growth and 10.1% year-on-year increase. Profit After Tax (PAT) stood at INR 64 crores, reflecting a significant 19.3% YoY growth, with a PAT margin of 17.15%. The EBITDA for the quarter was INR 100.7 crores, achieving an EBITDA margin of 26.95%, an expansion of 316 basis points YoY. This performance was primarily fueled by strong execution across all verticals, particularly in the payment solutions business.

Payment solutions remained the core pillar, contributing 53% to Q3 FY26 revenue, up from 51.1% in Q2 FY26. The company secured multi-year contracts with four existing PSU banks for payment cards and three public sector banks for personalized checkbooks and merchant QR kits, representing a business potential of approximately INR 489 crores. Management expressed strong traction in the metal card segment, with expectations for it to be a significant revenue and profitability driver from Q4 onwards, supported by discussions with three government banks and a global fintech.

The communication and fulfilment segment maintained stability, contributing 36.4% to the top line in Q3 FY26. Demand from BFSI, government, and enterprise customers remained healthy, driven by regulatory communication requirements and identity-led programs. The company secured multi-year contracts with five customers across banking and government institutions, with a business potential of approximately INR 210 crores. Proprietary software platforms, including logistics aggregation software, continue to differentiate the company in this space.

IoT solutions contributed 10.3% to the top line in Q3 FY26, with 6 new wins across retail, logistics, renewables, and manufacturing. A notable win includes a large Indian retail giant with over 19,000 stores. Management highlighted Seshaasai's unique strengths in chip bonding, inlay design, use-case-based tag manufacturing, and a full-stack solution approach as key differentiators. The company is bullish on IoT growth, anticipating continued momentum from its RFID tag business, Alomind Labs products, hardware, and the upcoming eSIM/SIM business.

As of December 31, 2025, the company maintained a healthy financial position with approximately INR 387 crores in cash and cash equivalents. Regarding IPO proceeds, INR 346 crores have been utilized, primarily for debt repayment (INR 300 crores) and capital expenditure (INR 34.28 crores) in Q3. The remaining INR 254 crores will be deployed in subsequent quarters for ongoing capacity expansions across four new facilities in Bengaluru, Nagpur, Navi Mumbai, and Kundli, supporting future business growth.

The improvement in gross margins was attributed to a favorable product mix, operational efficiencies, and strategic procurement initiatives, including reduced import costs and improved raw material prices. Management expressed confidence in maintaining gross margins in the 43-45% range going forward^⏳. The company anticipates Q4 FY26 to be stronger across verticals, aligning with historical trends, and expects continued growth in the IoT and payment solutions segments, particularly with the increasing adoption of metal cards.