Pine Labs and Paytm are increasingly being drawn into the same conversation as India’s digital payments industry enters a new phase of monetisation. Recently, NPCI introduced a 0.4% MDR on P2M UPI transactions above ₹2,000 from October 15, 2026.
Pine Labs has gained 17% so far in September after rising 18% in August, while Paytm has added 5% this month following a 28% jump in August. The rally comes as investors assess the potential impact of NPCI’s new MDR framework on payment companies.
The framework could create a recurring revenue stream for payment companies, with Pine Labs gaining attention due to its merchant acquiring and payment acceptance businesses.
Moreover, MOFSL initiated coverage on Pine Labs with a Buy rating and ₹250 target, versus ₹192, implying around 30% upside. Its investment case centres on Pine Labs’ merchant network, payment infrastructure, affordability solutions, issuing business and international operations.
In the bull case scenario, MOSL sees a target price of ₹330, indicating a 72% upside potential. However, in a bear case scenario, the target price is ₹192, implying a 27% downside potential.
Why is MOSL bullish on Pine Labs
The biggest opportunity, according to MOFSL, is Pine Labs’ ability to make more money from its existing merchant ecosystem rather than relying only on adding payment devices.
Its Digital Infrastructure and Transaction Processing (DITP) business remains the largest revenue contributor. The brokerage expects this segment to deliver around 24.5% revenue CAGR between FY26 and FY28.
Affordability is another key growth engine, with EMI, BNPL and related solutions expected to drive a 27% revenue CAGR. The issuing and acquiring platform is also scaling up, with FY26 GTV of over ₹640 billion and an estimated 25% GTV CAGR through FY28. International expansion offers another growth avenue, particularly in issuing.
Overall, MOFSL expects Pine Labs’ revenue, adjusted EBITDA and PAT to grow at 24%, 46% and 129% CAGRs, respectively, over FY26-28, while EBITDA margin is projected to rise to 28.7% by FY28 from around 9% in FY24.
Pine Labs vs Paytm: The comparison makes sense, but they are not identical
There is a clear reason to compare Pine Labs with Paytm: both operate across India’s digital payments ecosystem and have merchant-facing payment businesses. However, their business models are materially different.
MOFSL’s competitive analysis shows Pine Labs has a stronger focus on POS, merchant acquiring, enterprise merchant solutions, EMI/affordability, gift cards and issuing infrastructure, while Paytm has a much stronger presence in QR payments, soundboxes and its consumer app ecosystem.
The report also highlights the difference in scale. Pine Labs had platform GTV of ₹17.15 trillion, compared with ₹23.81 trillion for Paytm, while the number of merchants was around 1.1 million for Pine Labs versus approximately 49 million for Paytm in the report’s KPI table. Pine Labs reported revenue from operations of ₹27.1 billion, against Paytm’s ₹84.4 billion.
But Pine Labs’ profitability profile stands out. Its adjusted EBITDA margin was 21% in FY26, compared with 6% for Paytm, according to MOFSL’s comparison. Pine Labs also had adjusted EBITDA of ₹5.6 billion, while Paytm reported ₹5 billion.
The valuation gap is also significant. MOFSL’s estimates put Pine Labs at 15.1x FY27 EV/EBITDA and 11.2x FY28, compared with 46.1x and 30.7x for Paytm, respectively. On P/E, Pine Labs was at 85.9x FY27 and 44.4x FY28, versus 90.1x and 51.1x for Paytm.
This makes Paytm a useful comparison for understanding Pine Labs’ positioning, but calling Pine Labs simply a “new Paytm” would miss the key difference: Pine Labs is primarily a merchant-commerce and payment infrastructure platform, whereas Paytm has a much broader consumer-facing ecosystem.
Another important catalyst is the new 0.4% MDR on eligible P2M UPI transactions, which MOFSL expects to benefit Pine Labs because of its strong merchant acquiring franchise.
Overall, the Pine Labs story is less about replicating Paytm’s consumer scale and more about monetising its merchant infrastructure, affordability products, issuing platform and international expansion. That distinction is central to understanding why MOFSL sees room for substantial revenue and profitability growth through FY28.
Technical Outlook
According to Jigar S Patel, Senior Manager – Technical Research, Anand Rathi Share and Stock Brokers Limited, PINELABS is showing improving price momentum on the daily chart and has recently witnessed a strong upmove with a breakout from its consolidation phase.
“The stock is trading above its key moving averages, indicating a positive underlying trend. The RSI is around 66, sustaining above the 50 mark and supporting the prevailing momentum, although traders should monitor the overbought zone near 70. The recent price action also indicates renewed buying interest after a prolonged period of consolidation,” he noted.
Hence, one can accumulate PINELABS in the ₹198–190 zone for a potential move towards ₹215. The stop-loss should be maintained at ₹185 on a daily closing basis. Fresh buying can be considered on dips toward the accumulation zone, while a sustained move above the recent high may further strengthen the momentum, suggested the expert.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
