The brokerage has predicted that in FY28, Pine Labs will attain revenues of Rs 2,763 crore, in comparison with Rs 1,603 crore in FY25.
Its credit score and service provider funds companies will develop the quickest — 32% and 20%, respectively — in the identical timeframe, thereby driving the general development of the Noida-headquartered agency, the report said.
Comparing Peak XV Partners-backed Pine Labs with digital funds main Paytm, the report noticed that the previous’s Ebit (Earnings earlier than curiosity and taxes) margin was a lot increased, 12%, in comparison with 1.5% for Paytm within the September quarter of the present monetary yr. UBS expects Pine Labs’ margins to develop to twenty-eight% over the subsequent 5 years.
ETtechThe report famous that from a lack of Rs 1,414 crore in FY24, Paytm is predicted to swing to a internet revenue of Rs 2,959 crore in FY30. Pine Labs’ internet revenue is predicted to face at Rs 1,080 crore in FY30, in comparison with a Rs 341 crore loss in FY24.
PhonePe, which has filed its up to date draft paperwork with the Indian inventory market regulator for its IPO, has very excessive Esop bills relative to its revenues, the report said. In FY25, this stood at 43.4% for Phone Pe in comparison with 16.8% for Paytm and 5% for Pine Labs.
Overall, Pine Labs’ worker bills as a share of its revenues are on par with PhonePe, round 37%, whereas for Paytm, it’s 45%, the report famous. Pine Labs has round 4,500 workers, in comparison with round 10,000 for PhonePe and virtually 40,000 for Paytm.
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ETtechPaytm’s excessive worker base was wanted to serve its massive service provider ecosystem unfold throughout the nation, stated UBS.
UBS famous that Pine Labs’ shares are buying and selling at a big low cost in comparison with Paytm; the brokerage believes there’s an upside potential in Pine Labs given its sturdy enterprise contracts.
“In a domestic context, we believe B2B businesses are easier to monetise and are further along in their profitability journey than B2C-heavy businesses,” the report famous.
UBS attributes this to larger competitors within the shopper funds house and better switching prices for banks and retailers as they’re deeply built-in into the Pine Labs ecosystem.
