Pine Labs shares up 24% in one month; MOFSL sees 30% further upside; here's target price

Pine Labs shares have risen 24 per cent in the past month, and MOFSL has 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.

MOFSL 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.

According to MOFSL, DITP is the largest revenue contributor for Pine Labs, and the segment is estimated to deliver revenue CAGR of about 24.5 per cent over FY26-28. It added that the introduction of a 0.4 per cent MDR on eligible peer-to-merchant transactions would further benefit Pine Labs, given its strong merchant payments franchise.

MOFSL said the IAP business has also started scaling up meaningfully, with FY26 gross transaction value projected to grow 24 per cent year-on-year to Rs 640 billion. It expects the business to maintain healthy momentum and post GTV CAGR of about 25 per cent over FY26-28E, helped by prepaid programmes and increasing traction in international markets. On that basis, it has estimated revenue CAGR of 23 per cent over FY26-28E for the segment.

"Pine Labs is well-positioned to benefit from India's accelerating digital payments ecosystem. Its diversified product suite and deep relationships with merchants, brands and financial institutions provide multiple monetization levers beyond traditional payment processing," 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.