Fintech Stock to Buy Now for an Upside of 65%; Recommended by Morgan Stanley

Synopsis: The share of this company gained attention as Morgan Stanley sees 65 percent upside, backed by strong execution and digital payments growth visibility.

The article outlines the rationale behind the company’s upside potential, driven by strong operating leverage, improving cash flow conversion, and steady expansion in its digital payments ecosystem.

With a market capitlaization of Rs 16,949 crore, Pine Labs Ltd’s share is currently trading at Rs 148 per share, up by 1.23 percent from the previous close. The share of this company has given a negative return of 42 percent since its listing in November 2025.

Brokerage View

Morgan Stanley has kept an Equal-weight rating on Pine Labs with a target price of Rs 245, indicating around 65 percent upside from current levels. The view suggests steady growth expectations, supported by expansion in digital payments and improving merchant transaction activity. 

Rationale

The company is showing strong operating leverage, reflecting improved scalability in its digital payments and merchant solutions platform. This indicates that revenue growth is translating more efficiently into higher profitability as fixed costs are better absorbed across expanding transaction volumes.

Cash flow generation has also strengthened, with improved conversion of adjusted EBITDA into operating cash flow. This reflects better working capital management, disciplined cost control, and overall improvement in financial efficiency across operations.

Management has provided a healthy medium-term outlook, guiding for revenue growth of 21 percent to 23.5 percent. Growth is supported by structural expansion in digital payments adoption and a steadily widening merchant base across both offline and online ecosystems.

Robust Q4 Performance

Strong Profit and Cash Flow Performance: The company delivered its highest-ever quarterly PAT of over Rs 59 crore in Q4 FY26, marking a sharp YoY increase of Rs 88 crore. For FY26, PAT stood above Rs 113 crore, rising by Rs 258 crore YoY. Net operating cash flow also reached a record Rs 676 crore in Q4 FY26, reflecting strong earnings quality and robust cash conversion efficiency.

Platform Performance: The platform reported Gross Transaction Value of around $48 billion (Rs 4,35,000 crore), supported by 185 crore transactions, 20.3 lakh digital checkout points, and 11 lakh merchants. Growth remained healthy with 12 percent YoY increase in GTV, 9 percent in transactions, 14 percent in checkout points, and 16 percent in merchant base, indicating steady expansion across the ecosystem.

Key Wins and Product Expansion: The company secured major deals, including Wio Bank in the UAE for multi-year acquiring and processing, G-Cash in the Philippines as a payments technology partner, and a contract from India’s top 3 oil marketing companies. 

It also partnered with OpenAI for agentic commerce solutions and expanded its product suite with SignalIQ, biometric authentication, UPI Reserve Pay, and enhanced prepaid distribution through Woohoo 2.0 and 2800+ outlets in Malaysia.

About the Company 

Incorporated in 1998, Pine Labs is a leading Indian merchant commerce platform that provides point-of-sale (POS) solutions, payment processing, and merchant financing services. Headquartered in Noida, India, the company bridges the gap between financial institutions, major consumer brands, and over 690,000 retail merchants globally.

Financial Highlight: The revenue from operations grew by 17 percent to Rs 701 crore in Q4 FY26 from Rs 599 crore in Q4 FY25 , and EBIDT grew by 88 percent to Rs 106 crore in Q4 FY26 from Rs 56.6 crore in Q4 FY25. This was accompanied by a net profit turnaround to Rs 59.4 crore in Q4 FY26 from a net loss of Rs 28.9 crore in Q4 FY25, resulting in an EPS turnaround to Rs 0.52 per share in Q4 FY26 from a negative EPS of Rs 0.34 per share in Q4 FY25. 

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