Target: ₹225
CMP: ₹241.95
Pine Labs reported 17.8 per cent y-o-y revenue growth, with strong growth in the Issuing and acquiring business (up 32.5 per cent y-o-y) offsetting the weakness in the Digital Infrastructure and Transaction Processing (DITP) business (up 11.9 per cent y-o-y). EBITDA increased 46.7 per cent q-o-q and 132 per cent y-o-y on the back of operating leverage.
The management highlighted that Issuing, VAS, Affordability, and Online are all growing at +30 per cent y-o-y. However, DITP business’ revenue growth was dragged by the company moving away from hardware-included deals to software deals. Affordability business’ scale-up is leading to higher working capital investments, which resulted in -₹215 crore free cash flow for H1-FY26.
For Pine Labs, we are now building in 20.4 per cent revenue CAGR over FY25-28, with 24.3 per cent CAGR for the Issuing and Acquiring business (19.7 per cent earlier). We will watch out for the execution on this front, considering strong growth in Q2-FY26 and the tailwinds from international geography.
We are increasing our FY26E/27E EBITDA by 4.5/5.2 per cent on account of strong growth in the Issuing and Acquiring business. On FY28E, the stock trades at 27x EV/EBITDA and 52.9x P/E.
We increase our DCF-based TP to ₹225 (₹210 earlier). However, we maintain Reduce, given rising competitive intensity.
Published on December 4, 2025
