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Investing.com - Jefferies initiated coverage on Pine Labs (PINELABS:IN) with a Buy rating and a price target of INR300.00, citing the company’s strong position in digital payments and growth potential.
The investment firm highlighted Pine Labs’ leadership in store digital payments and prepaid cards, while noting it is building market share in online payments and international issuing business. Jefferies identified the company’s network with brands, merchants, and banks, combined with its technology platform, as key competitive advantages.
Jefferies projects Pine Labs can achieve 23% compound annual growth rate (CAGR) in revenue over FY25-28, with adjusted EBITDA margins potentially expanding from 15% to 27% by FY28. The firm noted that current valuations represent a discount to peers and could see rerating with consistent growth.
India’s digital payment market shows strong expansion potential, with the number of merchants accepting digital payments increasing from 45 million to 63 million over five years, while payments to merchants have quadrupled to Rs117 trillion, according to Jefferies’ analysis.
The firm expects the Total Payments Value from Digital Checkout Points to grow at 22% CAGR over the next five years, with the affordability market growing at 30% CAGR and the prepaid card market expanding at 21% CAGR.
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