Seshaasai Technologies: Navigating Market Shifts with Strategic Growth in Q2 FY26

Seshaasai Technologies Limited, a technology-driven solutions provider empowering payments, communication, and IoT, has reported a robust performance for the second quarter and half year ended September 30, 2025. The company's consolidated financial results reveal a sustained momentum across its key business verticals, demonstrating resilience amidst evolving market dynamics. Revenue from operations for Q2 FY26 stood at ₹3,523.4 million, marking a commendable 13.3% sequential growth. This strong top-line expansion translated into significant profitability, with EBITDA reaching ₹951.1 million, a 29.0% sequential increase, and an EBITDA margin of 26.9%. The net profit after tax (PAT) surged by an impressive 56.2% sequentially to ₹575.3 million, with a PAT margin of 16.3%. For the first half of FY26, the company reported a revenue of ₹6,632 million, an EBITDA of ₹1,688.7 million with a 25.3% margin, and a PAT of ₹943.7 million with a 14.2% margin.

While the payment solutions segment, historically the largest contributor, saw its share moderate to 51.1% of Q2 FY26 revenues (49.8% for H1 FY26), this was primarily attributed to external factors. These included lower card issuance volumes by banks due to program-driven and regulatory changes, a shortfall in new PMJDY account openings against projections, and a rise in inactive PMJDY accounts. Additionally, growing stress in unsecured retail lending portfolios and lower renewals of COVID-19 period cards contributed to this moderation. However, management confirmed that customer relationships remain strong, with no churn. The Communication and Fulfilment Solutions vertical maintained a steady performance, contributing 37.8% to Q2 FY26 revenues (40.0% for H1 FY26). The standout performer was the IoT Solutions segment, which contributed 10.8% to Q2 FY26 revenues (up from 6.9% in Q2 FY25) and witnessed a strong 31% growth in H1 FY26. This growth was driven by wallet share gains in renewable segments and new customer additions, underscoring the company's successful diversification efforts.

Strategic Initiatives and Future Outlook

Seshaasai Technologies is actively pursuing several strategic initiatives to drive future growth and enhance its market position. The company is broadening its payment solutions portfolio to include eco-friendly cards, metal cards, biometric cards, and 'Payment on the Go' solutions, aligning with new growth drivers and ESG priorities of banking clients. A significant focus is on expanding its IoT and RFID offerings, with investments in next-generation technologies like Bluetooth Low Energy and sensor-based RFID. The company is set to commence SIM card supplies to telecom operators in H2 FY26, which is expected to further accelerate growth in the IoT vertical. Furthermore, Seshaasai is exploring international markets, with plans to expand its offerings in the SAARC region, parts of Africa, and Eastern Europe, and is open to strategic acquisitions that can consolidate its market position and enhance its product portfolio.

Management expressed confidence in a stronger second half of FY26, anticipating a seasonal pickup in BFSI volumes, steady momentum in communication fulfillment, and continued traction in the IoT business. They also expect good growth in FY27. The company's proprietary technology platforms, including RUBIC, eTaTrak, IOMS, and izeIoT, provide a competitive edge by offering end-to-end solutions from design to deployment, enhancing customer stickiness and contributing to a steady recurring revenue stream. The company's strong balance sheet, bolstered by the repayment of ₹300 crore of debt using IPO proceeds, provides the flexibility to invest in these growth priorities.

Operational Excellence and Market Leadership

Seshaasai's commitment to operational excellence is evident in its improved gross margins, which reached 45.9% in Q2 FY26, up from 41.2% in Q2 FY25. This improvement was driven by a favorable product mix, operational efficiencies, and strategic procurement initiatives, including in-house manufacturing of inlays for the IoT vertical. The company's established leadership position is highlighted by its 31.9% market share in credit and debit card issuance in India in FY25, and its recognition as a 'Best Tech Brand in the BFSI sector' by Economic Times for four consecutive years. With a strong base of 708 customers, including 169 new additions, and an average customer relationship of over 10 years with its top 7 clients, Seshaasai demonstrates robust client retention and a stable business model. The company's extensive pan-India manufacturing network, comprising 24 self-sustaining units across seven locations, further underpins its operational capabilities and ability to serve a diverse clientele across the BFSI ecosystem.

Seshaasai Technologies continues to demonstrate strategic clarity and disciplined execution. By leveraging its technological prowess, strengthening customer relationships, and actively pursuing new growth avenues in IoT and international markets, the company is well-positioned for sustained growth and value creation for its stakeholders in the evolving digital and financial landscape.