Seshaasai Tech cuts IoT growth outlook, capex range; facility plan shifts
In two calls, management lowered FY27 IoT growth from 47%+ to 35-40%, cut capex from ₹160-200 cr to ₹140-160 cr, and swapped Nagpur for Nashik without explanation.
What's new
- Q1 FY27 revenue ₹377 cr, up 21.1% YoY; PAT ₹60 cr, up 63.8%.
- IoT revenue grew 145% YoY, contributing 18% of revenue.
- SIM production started with a large telecom operator, serving 20-25% of its prepaid/postpaid needs.
Themes from the call
Demand
IoT demand strong with 145% YoY growth, but guidance for FY27 cut to 35-40% range, below prior 47%+.
Margins
Gross margin 41.7%, EBITDA margin 25.1%; management expects improvement from product mix and volume but refuses to quantify.
Capital allocation
FY27 capex reduced to ₹140-160 cr from ₹160-200 cr; company holds ₹369 cr in cash.
Guidance watch
- FY27 revenue growth 8-12% YoY, H2 expected stronger than H1.
- IoT growth 35-40% for FY26-28, payment solutions 10-12%, communication & fulfillment flattish.
- Bengaluru metal-card facility by end of calendar year; ₹76 cr in PSB tenders over duration.
- Margins directional only; management refused to guide on EBITDA, PAT, or gross margin figures.
Risk flags
- Three guidance changes in two calls without explanation erodes credibility.
- Gross margin pressure from geopolitical, currency, commodity, and freight inflation unquantified.
- Facility plan discrepancy (Nagpur vs Nashik) could affect capex and capacity assumptions.
Key quotes
-
"For the following years, even with a higher base, we expect the IoT business growth to remain in the 35-40% range between FY26, FY27, and FY28."
— Seshaasai management, July 2026 call -
"Any precise number we give you today would likely be false precision. We can provide the building blocks..."
— Pawan Kumar, CFO, July 2026 call
The brief
Seshaasai Tech's Q1 numbers were strong: revenue up 21% to ₹377 crore, PAT up 64%, and IoT revenue more than doubled. But the call was overshadowed by a series of guidance reversals that the company did not explain. Two months ago, management told investors FY27 IoT would grow 'upward of 47%'. In this call, it said 35-40% — for the entire FY26-28 period. The FY27 capex plan was trimmed from ₹160-200 crore to ₹140-160 crore. And the facility list changed: Nagpur, previously under construction, was replaced by Nashik without a word about the old site. The CFO's defence on margin guidance — 'any precise number would be false precision' — does not address why the IoT growth trajectory was cut by over 10 percentage points. The company is still executing well on RFID and SIM production, and two PSB tenders add ₹76 crore visibility, but guidance reliability matters when investors are underwriting a 145% IoT growth base. Seshaasai still holds ₹369 crore in cash and maintains a diversified revenue mix. The business itself looks fine. The problem is the communication gap between calls. Three unwrapped changes in one quarter make it harder to trust the next set of numbers.
Three guidance reversals in three months make Seshaasai's visibility look less clear than it claims.