Pine Labs Limited

Technology — Software - Infrastructure · NSE

₹165.50−₹2.62 (−1.56%)

DalalBaazaar Score

58 / 100

🟡 Moderate

Verdict

CAUTION

Risk

High

Driven by high debt relative to equity, small-cap size, which brings sharper price swings, a very high earnings multiple, which leaves little margin for disappointment.

In simple words: The business is earning a fairly low return on the money invested in it, with both sales and profits growing well. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:48 pm

Understanding the Business

Company site ↗

The 60-second version of Pine Labs Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Pine Labs Limited, a technology company, provides digital payments and issuing solutions for merchants, consumer brands and enterprises, and financial institutions in India and internationally.

IndustrySoftware - Infrastructure

SectorTechnology

Employees5,007

Annual revenue₹2,396 Cr

How does it make money?

Turns over ₹2,396 Cr a year. Of every ₹100 of sales, about ₹5 reaches shareholders as profit, with ₹23 left at the operating level before interest, tax and depreciation. Each of its 5,007 employees supports ₹47.9 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹47.9 lakh

Who are its competitors?

The closest listed comparisons in its industry are TATA CONSULTANCY SERV LT, INFOSYS LIMITED, HCL TECHNOLOGIES LTD, WIPRO LTD. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?Little sign of one

Returns on capital of 3.5% are at or below what the capital likely costs. That is the financial pattern of a business competing largely on price, where advantage has to come from execution rather than position.

Peer median ROE32.0%

What is the outlook?

7 analysts covering the stock expect revenue to grow about 20.5% and earnings to grow about 97.9% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+20.5%

Est. earnings growth+97.9%

Analysts7

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +77% while net margin moved -124% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+77%

Margin effect-124%

DalalBaazaar Score

58/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Small Cap: thinner liquidity and sharper drawdowns are normal
✗ High leverage magnifies any downturn in earnings
✗ Profits have swung sharply from year to year — earnings are hard to forecast

Quality vs. Valuation

Company Quality

66/ 100

Good

How good the business is, ignoring the share price entirely.

Valuation

28/ 100

Expensive

What you are being asked to pay, ignoring how good the business is.

A good business, but the price already reflects that. The quality is real; the question is whether you are overpaying for it today.

Historical Valuation

Current P/E

149.1x

Sector Median

16.5x

median of 4 sector peers

⚠️Against its sector it trades 801% above the peer median of 16.5x.

vs. its own history

Not enough price and earnings history

vs. sector peers

Expensive

16.5x median of 4 peers · +801%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

33.6x

PEG

—

What's Good / What's Bad

🟢 What's Going Well4

Margins are improving
EBITDA margin is up from 9.6% to 22.6% over 3 years.
Cash flow has turned positive
Free cash flow moved from negative to positive over 3 years.
Return on equity is rising
ROE has improved from -7.1% to 1.9%.
Return on capital is rising
ROCE has improved from -5.9% to 3.5%.

🔴 What Needs Attention0

Nothing stands out as clearly deteriorating on the years of data available.

Red Flags

1 item require attention · 1 high

🔴High leverageFinancial
Debt/Equity of 7.47x — earnings must service borrowings before shareholders see anything.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 9.6% to 22.6%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.

🔴 Bear CaseWhat could go wrong?

Leverage amplifies any setback
Debt/Equity of 7.47x. Interest is payable whether or not the business has a good year.
A premium to the sector to defend
It trades 801% above the peer median. That premium needs a reason that persists, or it closes.
Earnings are hard to forecast
Profit has swung sharply from year to year, so any single year — good or bad — is a weak guide to the next. Cyclical earnings deserve lower multiples for that reason.
Size brings its own risk
Small Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1Revenue growth stays above 16% a year✓ 21.0% CAGR
Latest reported year was 19.6%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 21%✓ 22.6%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Interest cover stays above 3x✗ 2.7x
How much operating profit can fall before interest stops being comfortably covered.
4Free cash flow remains positive✓ ₹157 Cr
Profit that never becomes cash eventually stops being profit.
5Debt / EBITDA stays below 2x✓ 0.8x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.

Investment Checklist

7 / 12 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✓ Generates positive free cash flow
✗ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✓ Profit growing year-over-year
✗ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✓ Short-term technical trend isn't bearish

Price history

Quick Metrics

4 good · 3 neutral · 4 weak

Market Cap

₹19,111 Cr

Small Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

149.1x

Expensive

Expensive — verify against sector peers

P/B Ratio

3.20x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹1.11

Profitable

Profitable on a per-share basis

ROE

1.9%

Weak

Weak capital efficiency

ROCE

3.5%

Weak

Low return on total capital employed

Debt/Equity

7.47x

High

High leverage

Revenue Growth (YoY)

19.6%

Healthy

Healthy top-line growth

Profit Growth (YoY)

264.4%

Healthy

Profits growing at a healthy clip

Dividend Yield

None

No dividend yield reported — usually means no payout, but verify if one was recently initiated

Free Cash Flow

₹157 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

P/E (Forward)

37.5x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

3.1%

Weak

Thin margins leave little room for error

Net Margin

4.5%

Average

Average bottom-line conversion

Current Ratio

1.52

Comfortable

Healthy short-term liquidity

52W Range Position

21%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

174.6 / 170.2

Bullish alignment (short > long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

36.7

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹1,354 Cr	₹1,433 Cr	₹1,905 Cr	₹2,396 Cr	+21.0%
EBITDA	₹130 Cr	₹110 Cr	₹277 Cr	₹541 Cr	+60.7%
EBITDA Margin	9.6%	7.7%	14.5%	22.6%	—
PAT (Net Profit)	-₹265 Cr	-₹342 Cr	-₹145 Cr	₹113 Cr	—
EPS	₹-2.31	₹-2.98	₹-1.45	₹1.02	—
ROE	-7.1%	-9.7%	-4.1%	1.9%	—
ROCE	-5.9%	-8.6%	-1.6%	3.5%	—
Total Debt	₹438 Cr	₹654 Cr	₹970 Cr	₹441 Cr	+0.2%
Free Cash Flow	-₹519 Cr	-₹495 Cr	-₹101 Cr	₹157 Cr	—

🟢 Revenue has grown at 21.0% a year over 3 years.

🟢 EBITDA has grown at 60.7% a year over 3 years.

🟢 EBITDA Margin has risen from 9.6% to 22.6% over 3 years (+13.0 pts).

🟢 PAT (Net Profit) has turned positive, from -₹265 Cr to ₹113 Cr.

🟢 EPS has turned positive, from ₹-2.31 to ₹1.02.

🟢 ROE has risen from -7.1% to 1.9% over 3 years (+9.0 pts).

🟢 ROCE has risen from -5.9% to 3.5% over 3 years (+9.5 pts).

🟡 Total Debt has been broadly flat over 3 years (0.2% a year).

🟢 Free Cash Flow has turned positive, from -₹519 Cr to ₹157 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹13,297 Cr

Total Liabilities

₹7,402 Cr

Cash & Equivalents

₹1,393 Cr

Operating Cash Flow

₹395 Cr

Capex

-₹238 Cr

Shareholding (proxy)

Institutional Holding

64.3%

Insider Holding

27.2%

Analyst Consensus

Recommendations

10 Buy · 1 Hold · 0 Sell

Target Price (Mean)

₹220.18

+33.0% vs CMP

Target Range

₹190 – ₹250

Peer Comparison

Company	P/E	ROE
TATA CONSULTANCY SERV LT	17.3x	45.6%
INFOSYS LIMITED	15.8x	32.0%
HCL TECHNOLOGIES LTD	20.4x	24.6%
WIPRO LTD	14.5x	15.9%

Recent News

5 mixed1 general

PINE LABS Share Price declines; key fundamentals explained

Univest, 09 OctPrice move

🟡Mixed / dependsA price move rather than a change in the business. If the figures on this page have not moved, the fall is either an opportunity or news they have yet to catch up with.

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

The Economic Times, 21 SeptPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Pine Labs up 7% from day's low amid block deals; MOFSL bullish on stock

Business Standard, 22 SeptAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Pine Labs To Deploy 10 Lakh Soundboxes Across India; Shares Fall 3.55%

HDFC Sky, 24 SeptPrice move

🟡Mixed / dependsA price move rather than a change in the business. If the figures on this page have not moved, the fall is either an opportunity or news they have yet to catch up with.

Pine Labs shares rise 2% after Rs 934 crore block deal, likely Mastercard exit

Dealroom, 22 SeptPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Big decision! UPI MDR fee deferred till Diwali; check impact on Paytm, Pine Labs, One Mobikwik, Moneyview, Zaggle shares

TradingView, 13 Oct

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

StrongGrowth

MiddlingBusiness Quality · Financial Health · Profitability

WeakValuation · Risk

Points for each in the Score ↑

Good business, demanding price

The quality is real and the price already reflects it. Buying here is a bet that the business keeps compounding for long enough to grow into the multiple — which good businesses often do, but it removes the margin for error that a lower price would have given you. 1 high-severity red flag sits above this conclusion and should be read first.

1 of 5 tripwires tripped — Interest cover stays above 3x · see Key things to watch ↑