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Pine Labs Soars: 72% Upside Predicted
21 Sep
Summary
- Motilal Oswal initiates coverage with a 'Buy' rating.
- Pine Labs share price target set at ₹250.
- MDR framework implementation expected Oct 15, 2026.
Shares of Pine Labs saw an increase following Motilal Oswal Financial Services' initiation of coverage, setting a target price of ₹250 per share. This recommendation includes a 'Buy' rating, projecting a potential 72% upside in a bull case. The brokerage anticipates strong revenue growth, with an estimated CAGR of approximately 24% over FY26-28.
The company's robust merchant-acquiring and payments franchise is expected to be significantly bolstered by the central government's Merchant Discount Rate (MDR) framework. This framework, set to take effect on October 15, 2026, applies to large-value UPI person-to-merchant transactions. This strategic development is poised to enhance Pine Labs' financial performance, with projected adj. EBITDA margins improving substantially.
Motilal Oswal forecasts adj. EBITDA margins to climb from around 9% in FY24 to approximately 29% by FY28, driven by improved operating leverage and a shift towards higher-margin, transaction-led businesses. In its bear case scenario, a 27% decline in value is projected, with a target price of ₹140, while the bull case suggests a target of ₹330.
