Key Moments
- Jefferies initiated coverage on Pine Labs with a “buy” rating and a 300 rupees target. Morgan Stanley started with “equal-weight” and a 260 rupees target.
- Pine Labs processed 11.4 trillion rupees in GTV across 5.7 billion transactions in fiscal 2025. It generated 22.7 billion rupees in revenue but remained loss-making.
- Both brokerages expect strong top-line growth and margin expansion through fiscal 2028. However, Morgan Stanley’s forecasts are more conservative than Jefferies’.
Contrasting Initiations Lift Pine Labs Shares
Investing.com — Pine Labs saw its shares rise on Tuesday after diverging initial recommendations from two major brokerages. Jefferies gave a “buy” rating with a 300 rupees target. Meanwhile, Morgan Stanley initiated coverage with an “equal-weight” stance and a 260 rupees target.
Based on the closing price of 243 rupees on December 19, Jefferies’ target suggests a 23% upside. In contrast, Morgan Stanley’s target implies only 7% potential gain. Pine Labs currently carries a market value of around 280 billion rupees.
Market Position and Operating Scale
Pine Labs is India’s largest digital payments infrastructure provider. Jefferies highlighted the company’s dominant positions in key niches. Analysts estimate that Pine Labs holds 70-75% of closed-loop card issuance and 90-95% of store-based EMI transactions on credit cards.
In fiscal year 2025, which ended March 31, Pine Labs processed 11.4 trillion rupees in gross transaction value (GTV) across 5.7 billion transactions. The platform supported 1.8 million digital checkout points and 954,000 registered merchants.
Financial Performance and Segment Breakdown
Revenue for fiscal 2025 reached 22.7 billion rupees, up 29% from the prior year. However, the company remained in the red, posting a net loss of 1.5 billion rupees, improved from a 3.4 billion rupees loss in fiscal 2024.
Pine Labs operates two main segments: Digital Infrastructure & Transaction Platform and Issuing & Acquiring Platform. The Digital Infrastructure unit contributed 16 billion rupees, or 71% of revenue. The Issuing & Acquiring unit generated 6.7 billion rupees, representing 29% of revenue.
| Metric (Fiscal 2025) | Value |
|---|---|
| Revenue | 22.7 billion rupees |
| Net loss | 1.5 billion rupees |
| GTV processed | 11.4 trillion rupees |
| Transactions | 5.7 billion |
| Digital checkout points | 1.8 million |
| Registered merchants | 954,000 |
Segment Dynamics and Volumes
Within the Digital Infrastructure & Transaction Platform segment, Pine Labs processed 2 trillion rupees in GTV, a 42% increase from the prior year. The segment benefits from partnerships with 40 credit institutions.
The Issuing & Acquiring Platform handled 515 billion rupees in GTV and issued 713 million prepaid cards in fiscal 2025.
Differing Growth and Profitability Outlooks
Jefferies expects revenue to reach 42 billion rupees by fiscal 2028, a 23% CAGR. Adjusted EBITDA margins are forecast to rise from 15% to 27%. The firm predicts a net profit of 7 billion rupees and 2.9 million digital checkout points by fiscal 2028.
Morgan Stanley projects revenue of 38.1 billion rupees by fiscal 2028, a 19% CAGR. It expects adjusted EBITDA margins to grow to 25% and net profit to 5 billion rupees. Digital checkout points may reach 3.0 million.
| Forecast to Fiscal 2028 | Jefferies | Morgan Stanley |
|---|---|---|
| Revenue | 42 billion rupees | 38.1 billion rupees |
| Revenue CAGR | 23% | 19% |
| Adjusted EBITDA margin | 27% | 25% |
| Net profit | 7 billion rupees | 5 billion rupees |
| Digital checkout points | 2.9 million | 3.0 million |
Margin Drivers and Cost Structure
Both brokerages base margin growth on operating leverage. Capital spending has declined, supporting higher profitability. Morgan Stanley noted that capex as a share of digital payment revenue fell from 50% in fiscal 2022 to 9% in fiscal 2025.
Pine Labs’ contribution margins range from 76-78%. The Digital Infrastructure segment operates at 83%, while the Issuing & Acquiring segment runs at 60-65%.
Employee costs totaled 8.7 billion rupees in fiscal 2025, or 38% of revenue. The company employed 4,498 staff as of Q2 fiscal 2026.
Indirect costs are expected to grow at 12-13% CAGR through fiscal 2028, slower than revenue growth. This should support a transition to sustained profitability.
International Footprint and Issuing Business
International revenue accounted for 15% of fiscal 2025 revenue, or 3.4 billion rupees, up from 11% in fiscal 2024. The company operates in Malaysia, UAE, Singapore, Australia, the US, and Africa.
Across these markets, Pine Labs serves 28 card issuers managing 77 million accounts as of June 30, 2025. The international issuing business has lower take rates but offers significant growth potential.
Valuation Frameworks and Risk Factors
Differences in target prices reflect valuation methods. Jefferies uses a 32x multiple on Dec 2027 EV/EBITDA. It compares this with peers PB Fintech at 67x and Paytm at 51x.
Morgan Stanley applies a 28x multiple on fiscal 2028 EV/EBITDA. It considers the stock fairly priced at current levels.
Key risks include disruption to POS models, deterioration in the credit cycle, and regulatory changes. Morgan Stanley also notes customer concentration, with the top ten clients representing 29.3% of revenue. Pine Labs had 8.3 billion rupees in borrowings as of March 31.
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