Seshaasai Q4 FY26: Margin expansion, diversification, and the next leg in IoT

Seshaasai Technologies ended Q4 FY26 with a stronger profitability profile and a clearer message on where its growth engines are shifting. For the quarter, revenue from operations rose to INR 404.18 crore, up 9.6 percent year on year. EBITDA increased to INR 124.50 crore with a 30.8 percent margin, and PAT grew to INR 81.79 crore with a 20.24 percent margin.

The quarter’s numbers matter because they came alongside a year in which the company’s top line was broadly stable while margins improved materially. FY26 revenue from operations was INR 1,441.14 crore, down 1.5 percent versus FY25, but EBITDA margin expanded to 27.4 percent and PAT rose to INR 240.01 crore.

Q4 performance: operating leverage, product mix, and lower finance costs

In Q4 FY26, Seshaasai saw gross margin improve to 46.93 percent from 43.98 percent in Q4 FY25, with management attributing the improvement to procurement efficiencies, product mix, and operating leverage. The CFO added colour during Q&A, stating that procurement consolidation and advanced inventory planning helped deliver about 7 to 8 percent savings at the material consumed level for the full year.

Lower finance costs also supported profitability. The company highlighted deleveraging post IPO, and the consolidated financial summary shows Q4 finance costs dropping to INR 2.91 crore from INR 9.11 crore in Q4 FY25.

Segment mix: Payments remains core, but growth is spreading

Management described FY26 as a year of resilience and transition, with deliberate diversification across three verticals.

Payment Solutions remained the largest business and management said it contributed about 50 percent of FY26 revenue. However, the segment faced temporary moderation due to slower issuance volumes, lower renewal volumes linked to COVID-era issuance patterns, and a tighter compliance environment for banks and fintechs.

At the same time, the company continued to push premiumization and value-added programs. Metal cards were positioned as a key growth lever, supported by a growing interest among PSU and private banks and traction with fintechs focused on GenZ and wealth customers. The company also cited expansion opportunities in transit programs, including state transport and urban mobility ecosystems, and said it onboarded two new transit service aggregators.

Communication and Fulfilment Solutions accounted for 39 percent of FY26 revenue and recorded 29 percent year-on-year growth, per management commentary. The company positioned this segment as a technology-driven platform that combines secure communication, fulfilment, traceability, and logistics integration, supported by proprietary systems such as RUBIC, eTaTrak, and IOMS.

IoT Solutions contributed 11 percent of FY26 revenue and grew 45 percent year on year, as stated in the call. Management described IoT as a long-term growth engine driven by RFID adoption, traceability needs, and the rising importance of sensor-led and platform-based ecosystems.

Building capacity and capabilities: facilities, certifications, and IP

Seshaasai continues to invest behind future capacity. The company disclosed multiple facility additions: a 40,000 sq. ft. unit in Kundli for IoT and CFS and a 20,000 sq. ft. unit in Navi Mumbai for Payment Solutions are operational. Facilities in Bengaluru and Nagpur remain under construction.

A major capability milestone highlighted across the presentation and the call was GSMA SAS-UP certification at the Bengaluru facility for SIM and eSIM manufacturing and personalization, including data generation and PKI certificate handling. Management said SIM card manufacturing has scaled up and started contributing materially to revenue in Q4. For eSIM, they indicated one more compliance step is expected to be completed by July or August, following which commercialization should begin, with eSIM revenue contribution expected from the second half of the year.

The company also emphasized intellectual property development. It disclosed two patents granted in Q4 FY26, one for metal cards and one for an optimized QR code, taking total granted patents to five. Management clarified that the patent grant does not change the fact that metal cards have been commercial for several years, but it reinforces the company’s focus on proprietary innovation.

On capital allocation, the company shared an IPO funds utilization update. As of the end of Q4 FY26, it had utilized INR 405.52 crore out of INR 600.00 crore, leaving INR 194.48 crore unutilized. Management also stated it expects capex of about INR 160 crore to INR 200 crore during FY27 across Payment Solutions, IoT, and modernization.

What to track from here

Management did not provide formal FY27 guidance, citing macro and geopolitical uncertainty, and said it may revisit guidance after Q1. For investors, the near-term questions will likely revolve around three measurable themes.

First is whether Payment Solutions volumes stabilize as renewal cycles normalize, especially since management expects the segment to bottom out and improve gradually. Second is whether the premium mix, particularly metal cards, continues to expand. Management stated metal cards contributed around 4 percent of Payment Solutions in FY26.

Third is the pace of scaling in IoT. Management said RFID capacity utilization was around 70 percent for the year and 80 to 85 percent during Q4, and highlighted efforts to localize inlay manufacturing and increase domestic value addition. While the company did not quantify margin uplift from backward integration, it linked it to supply chain resilience, market share gains, and profitability potential.

Seshaasai ended FY26 with a stronger margin structure, lower finance costs, and a broader growth narrative beyond traditional BFSI printing and cards. The next phase depends on consistent execution across premium payments, platform-led fulfilment, and the ramp-up in RFID, SIM, and eSIM capabilities.