Pine Labs shares jump 6% after 4.3% equity changed hands in block deal

Shares of Pine Labs jumped 6 per cent in Tuesday's trade after 4.97 crore shares, accounting for 4.3 per cent stake, changed hands in block deals. The deal is said to have taken place at Rs 187.75 apiece. As per term sheet seen by Business Today, Mastercard Asia/pacific Pte was looking to offload Pine Labs shares at an offer price of Rs 179.50, which was at 7.3 per cent discount to Monday's closing price of Rs 293.70 apiece. The block deal was valued at Rs 892.50 crore.

Pine Labs shares jumped 5.91 per cent to hit a high of Rs 205 apiece. The stock witnessed a turnover of Rs 994.73 crore, with 527.92 lakh shares changing hands by 10 am against a two-week average volume of 44.93 lakh shares. Buyers of the block deal are not immediately known.

Earlier this month, Pine Labs' 3.1 per cent stake changed hands in two blocks on September 2. As per NSE data, 3,54,56,317 Pine Labs shares changed hands at Rs 155.10 apiece, aggregating Rs 549.93 crore.

MOFSL this week initiated coverage on the stock with a Buy rating and a target price of Rs 250 a share, implying a further 30 per cent upside. The domestic brokerage said Pine Labs is a leading merchant commerce platform offering payment acceptance, affordability and issuing solutions. It said the company’s digital infrastructure and transaction platform, or DITP, and issuing and acquiring platform, or IAP, generate a healthy mix of recurring and transaction-linked revenue, supported by long-standing enterprise relationships and scalable technology.

"While overseas operations currently operate at lower margins than the domestic business, improving scale, a richer product mix and higher processing volumes should support steady margin expansion, making IAP one of Pine Labs' fastestgrowing earnings drivers in the medium term," MOFSL said.

As the revenue mix gradually shifts toward higher-margin, transaction-led businesses, MOFSL estimate adjusted Ebitda margin to improve meaningfully from 9 per cent in FY24 to 29 per cent by FY28E, aided by improving operating leverage.