Fintech Stock to Buy Now for an Upside of 43%, Recommended by UBS

Synopsis : UBS sees a 43% upside in a small-cap payments platform, highlighting its scalable B2B model, strong market positioning, superior profitability potential, and significant valuation discount compared to peers.

A small-cap company that is a leading Indian merchant commerce platform that provides point-of-sale (POS) solutions, payment processing, and merchant financing services, is in the spotlight after receiving Buy rating with target price by UBS. 

With the market capitalization of Rs. 20,099.43 crore, the shares of Pine Labs Limited closed at Rs. 174.79, down by 0.98 percent from its previous day’s close price of Rs. 176.52 per equity share. 

UBS has initiated coverage on Pine Labs with a price target of Rs. 250, implying a potential upside of 43 percent from its current trading levels near Rs. 174.79. The brokerage believes that the stock’s current valuation discount relative to Paytm is excessive and not justified, given Pine Labs superior profitability metrics.

The company recently reported a net profit of Rs. 42 crore in Q3, a significant turnaround from a net loss of Rs. 57 crore in the same quarter last year. Revenue grew 24 percent year-on-year to Rs. 744 crore, and adjusted EBITDA jumped 59 percent YoY, highlighting a clear improvement in operational performance.

B2B Payments Platform

Pine Labs operates a B2B payments platform catering to large enterprises, offering scalable monetization potential. UBS notes that the company’s business model is less complex to scale than B2C peers like Paytm, making its growth prospects more predictable and its margins more stable.

Valuation Gap

Currently, Pine Labs trades at a 45 percent discount to Paytm on FY28 estimated Enterprise Value to EBIT. UBS argues that this gap is unwarranted, as Pine Labs demonstrates higher profitability and a more scalable B2B franchise, making it attractive for investors looking for growth and margin expansion.

Financials

Pine Labs is a technology company incorporated in 1998 and headquartered in Gurugram, India, that provides digital payments and issuing solutions to merchants, consumer brands, enterprises, and financial institutions across India, Southeast Asia, the UAE, Australia, the US, and Africa. The company operates through Digital Infrastructure & Transaction Platforms (under brands like Pine Labs, Mosambee, Benow, Setu, Qfix, and Fave) enabling merchants to accept cards, wallets, UPI, QR codes, pay-later options, loyalty points, and online bill payments, and through Issuing & Acquiring Platforms that issue, process, and distribute prepaid cards.

The Company Ltd reported strong Q3FY26 results, with revenue of Rs. 744 crore, up 23.6 percent YoY from Rs. 602 crore in Q3FY25 and 14.5 percent QoQ from Rs. 650 crore in Q2FY26. The growth was driven by higher sales across its core business segments.

Net profit turned positive at Rs. 42 crore, compared to a loss of Rs. 57 crore in Q3FY25 and increased by 600 percent from Rs. 6 crore in Q2FY26, highlighting a strong turnaround. The company’s focus on high-margin projects and improved execution contributed to the recovery in profitability.

Q3 Highlights

In Q3, Pine Labs expanded its footprint by launching in-store payments and affordability solutions in Singapore, serving retailers such as iStudio, Samsung, and Courts. The company secured over 100 new marquee clients across its offerings, including Honeywell, Carrier, Philips, Mumbai Duty Free, Waymo, Miniso, Blinkit, and Caribbean Airlines. 

It strengthened its product suite with additions like Agentic bill payments, mAadhaar, Apple Pay, and Subscription UPI Autopay, while also launching co-branded prepaid programs in partnership with expense management platforms such as Zoho and Pazy. 

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