Investec has initiated coverage on Seshaasai Technologies Ltd. with a 'Buy' rating and a target price of Rs 430, saying the company combines a stable, cash-generating payment card business with a fast-growing Internet of Things (IoT) segment that could drive its next phase of growth.
Shares of Seshaasai Technologies rose as much as 7.37% to Rs 394.40 on Tuesday.
Investec described Seshaasai as India's dominant payment card manufacturer, with around 31.9% market share in FY25. The brokerage said the company operates in an oligopolistic market with high entry barriers, supported by regulatory approvals, deep relationships with banks and a sticky customer base that generates recurring revenue.
Despite rising adoption of digital payments and UPI, Investec believes payment cards will remain relevant. Banks are expected to continue issuing debit and credit cards, while premiumisation and low credit card penetration in India should support long-term demand. The brokerage noted that nearly 97% of Seshaasai's revenue base is recurring, providing predictable cash flows and resilience.
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While the payment card business remains the company's core strength, Investec believes its IoT division is emerging as the next growth engine.
The brokerage expects the IoT business — which provides RFID-based solutions for inventory tracking, automation and enterprise applications — to benefit from rising digitalisation across industries. It forecasts the segment's revenue to grow at a 45% compound annual growth rate between FY26 and FY29.
Investec also mentioned that EBITDA margins have expanded steadily over the past few years through operating efficiencies and scale benefits, while cash conversion has strengthened significantly. The brokerage expects margins to remain healthy and forecasts revenue and EBITDA to grow at around 12% annually over FY26-FY29.
Investec said key risks include slower-than-expected recovery in card issuance, execution challenges in the IoT business and rising competition.
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