Emkay Financial Advises Caution on Pine Labs, Initiates Coverage with 'REDUCE' Rating

Overview

Emkay Global Financial has initiated coverage on Pine Labs with a 'REDUCE' recommendation and a target price of Rs 210. The research report cites rising competition in key business segments, including merchant acquisition and the Indian gift card business, as primary concerns. While acknowledging Pine Labs' strengths in enterprise POS and EMI aggregation, the report highlights distribution weaknesses in low-end device segments and volatile margins in its international operations. Emkay projects a 19% revenue CAGR but a significant 53% EBITDA CAGR on a low base for FY25-28, noting the stock trades at high multiples, leading to an unfavorable risk-reward outlook.