Pine Labs shares can rally 30%, says Motilal Oswal after initiating coverage with Buy. Here’s why

Pine Labs shares rose 2% to Rs 196 on the BSE on Monday after Motilal Oswal initiated coverage with a Buy call and a target price of Rs 250, implying 30% upside from current levels.

Pine Labs is a leading merchant commerce platform offering payment acceptance, affordability and issuing solutions. Its digital infrastructure and transaction platform (DITP) and issuing and acquiring platform (IAP) generate a healthy mix of recurring and transaction-linked revenue, aided by long-standing enterprise relationships and scalable technology, the brokerage said.

Cross-section of multiple monetisation rails

Motilal Oswal said Pine Labs has built an integrated merchant commerce platform spanning payment acceptance, affordability, issuing and fintech infrastructure.


The company serves more than 10 lakh merchants, over 750 brands and enterprises, and more than 200 financial institutions. In FY26, Pine Labs processed a gross transaction value (GTV) of Rs 17.2 lakh crore across 740 crore transactions.

Beyond the core business, Pine Labs has broadened its platform across gifting, online payments, fintech infrastructure and issuing, adding capabilities such as Plural, Setu, Qwikcilver and Fave. The wider stack allows it to address more use cases and widen its monetisation opportunities.

International markets are emerging as an important growth driver for Pine Labs. Partnerships with global retailers, financial institutions and platforms, including Amazon, are strengthening its issuing franchise.

DITP to remain key driver

The digital infrastructure and transaction platform (DITP) is Pine Labs' largest business, bringing together payment acceptance, affordability, merchant software and other value-added services on a single platform, Motilal Oswal said in a note.

The breadth of offerings allows the company to generate revenue from subscriptions, transaction processing, and merchant services, reducing dependence on any single revenue stream. “The business has delivered a 16.8% revenue CAGR over FY23-26, and we estimate growth to remain healthy at 24.5% over FY26-28 and contribution margin to remain around 82-83% by FY28E.”

Affordability key monetization engine

Affordability is expected to emerge as the key growth driver for DITP, offsetting the moderation in traditional device subscription revenue, analysts said.

Also read: FIIs pull out Rs 6,200 crore from financials but CIOs say banks could be India’s next big largecap trade

Subscription income from POS rentals is likely to clock a modest 11% CAGR over FY26-28E, while transaction-led revenue from EMI, BNPL and other affordability solutions will gain traction, aided by deeper merchant adoption.

“With its extensive merchant network and strong issuer relationships, Pine Labs is well positioned to capitalise on this opportunity, and we estimate the affordability business to deliver a healthy ~27% revenue CAGR over FY26-28E.”

Motilal Oswal Pine Labs valuation

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 monetisation levers beyond traditional payment processing.

“We estimate a healthy revenue CAGR of ~24% over FY26-28E, driven by stable growth in DITP, continued traction in affordability solutions and online payments, and a faster scale-up of IAP business. DITP will remain the largest revenue contributor, accounting for ~68% of revenue, while IAP business is set to outpace the broader portfolio.”

Disclaimer: This article has been written by Veer Sharma, who is not a SEBI-registered Research Analyst or an Investment Adviser. Veer Sharma and his/her ‘relative(s)’ (as defined under Section 2(77) of the Companies Act, 2013) do not hold any financial interest in the companies mentioned in this article as of the date of publication. The views/recommendations mentioned in this article, wherever applicable, are those of the respective SEBI-registered Research Analyst/brokerage and have been reproduced/reported with due attribution. They should not be construed as the views or recommendations of The Economic Times Digital or the journalist. Readers are advised to consider the original research report and make their investment decisions based on their own assessment. Brokerage disclaimers here.