Morgan Stanley has initiated coverage on Pine Labs with an equal-weight rating and a target price of ₹260 per share, citing a balance between strong business fundamentals and a valuation that already factors in much of the growth potential. The brokerage said Pine Labs enjoys leadership positions across its focus segments, supported by first-mover advantages and a well-established partner ecosystem.
According to Morgan Stanley, Pine Labs is expected to deliver a revenue CAGR of around 19% over FY25–28, driven by continued expansion in merchant payments, enterprise solutions and value-added services. The brokerage also expects EBIT margins to improve steadily, reaching around 20% by FY28, as the company transitions towards a more asset-light operating model.
However, Morgan Stanley believes these positives are largely reflected in current valuations. The equal-weight stance is based on a full valuation multiple of around 28x FY28 EV/EBITDA, which the brokerage considers fair given execution risks, competitive intensity and the evolving regulatory environment in digital payments.
While Pine Labs’ long-term opportunity remains attractive, Morgan Stanley said near-term stock performance is likely to track earnings delivery closely, with limited room for valuation re-rating unless growth meaningfully exceeds expectations.
Disclaimer: The views and recommendations above are those of Morgan Stanley. Business Upturn does not endorse them. Please consult a financial advisor before making investment decisions.
