Protean e-Governance Technologies is facing a major setback as its stock hit the lower circuit today, trading at ₹1,143 on the NSE. The stock has now fallen to its 52-week low, erasing the recent recovery it had shown. Over the past six months, the stock has delivered a negative return of 22%, raising concerns among investors and market analysts.

The sharp decline follows negative developments for the company. The Income Tax Department has removed Protean from the list of managed service providers (MSPs) for PAN card processing. Although the company still holds existing PAN-related contracts, the visibility for future orders in this segment is now significantly reduced.

This development is particularly damaging as PAN-related services contribute approximately 50% to the company’s total revenue. Analysts believe this could severely impact the company’s profitability in the coming years. Estimates suggest that revenue from PAN processing could fall by as much as 75% over the next 2 to 3 years. As a result, FY26 earnings are expected to remain flat, and total revenue could decline by around 35% by FY27.

A substantial portion of Protean’s business, around 70-74%, comes from government contracts. The removal from the MSP list is therefore seen as a major blow to its business model. Furthermore, there are concerns that additional challenges may arise, such as margin pressures, a freeze in new mandates (MBBs), and stagnant volumes in initiatives like ONDC.

In summary, Protean e-Governance Technologies is facing a series of significant headwinds that have raised questions about its future growth and stability.

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