2 hrs ago
Motilal Oswal Sees 30% Upside in Pine Labs
Motilal Oswal, a brokerage, studied Pine Labs and said its shares could rise.
It gave the stock a Buy rating and a target price of Rs 250.
Pine Labs helps businesses accept payments and offers other financial technology services.
It works with more than 1 million merchants and many brands and banks.
The brokerage expects payment plans such as monthly instalments and buy now, pay later to support growth.
It also expects Pine Labs to expand in smaller businesses and overseas markets.
The company’s profit margins are expected to improve significantly.
These estimates are the brokerage’s views, not a guarantee of future returns.
Motilal Oswal initiated coverage of Pine Labs with a Buy rating and a Rs 250 target price.
The brokerage expects Pine Labs’ revenue, adjusted EBITDA and PAT to grow at CAGRs of 24%, 46% and 129% between FY26 and FY28.
Pine Labs serves more than 1 million merchants, 750-plus brands and enterprises, and over 200 financial institutions.
Affordability products such as EMI and BNPL are expected to become key growth drivers as traditional device-subscription growth moderates.
Motilal Oswal expects adjusted EBITDA margins to rise from about 9% in FY24 to 28.7% by FY28.
- Who
- Motilal Oswal and Pine Labs.
- What
- Motilal Oswal initiated coverage of Pine Labs with a Buy rating and a Rs 250 target price, implying around 30% upside from the current market price.
- Where
- Pine Labs operates across merchant payments and international markets including Southeast Asia, Australia, the United Arab Emirates and the United States.
- When
- The growth estimates cover FY26 to FY28, while the target is discussed over the next 12 months.
- Why
- The brokerage cited growth in digital payments, affordability products, issuing, international operations and improving EBITDA margins.
Key facts
- Brokerage rating
- Buy
- Target price
- Rs 250
- Merchant base
- More than 1 million merchants
- FY26 gross transaction value
- Rs 17.2 trillion through 7.4 billion transactions
- Adjusted EBITDA margin
- Expected to rise from around 9% in FY24 to 28.7% by FY28
- FY26-FY28 revenue CAGR
- Estimated at 24%
- FY26-FY28 adjusted EBITDA CAGR
- Estimated at 46%
Quotes
Motilal Oswal report
Brokerage research report covering Pine Labs
“Affordability is expected to emerge as the key growth driver for DITP, offsetting the moderation in traditional device subscription revenue.”
financialexpress.com
“Pine Labs has created a complete merchant commerce platform across payment acceptance, affordability, issuing, and fintech infra.”
financialexpress.com
Sources
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