Pine Labs Shares Drop 5.6% as Q1 Profit Falls 67%
Fintech firm Pine Labs saw its shares decline by 5.6% on Monday following the release of its first-quarter financial results. The company reported a 67% quarter-over-quarter decrease in profit.
Indian fintech company Pine Labs experienced a 5.6% drop in its share price on Monday, reaching an intra-day low of ₹144.4 on the BSE. This decline followed the company's announcement of its first-quarter financial results for FY27, with investors expressing concern over shrinking margins.
The company reported a significant 67% sequential drop in profit for the first quarter, down to ₹19.6 crore from ₹59.4 crore in the preceding quarter. On a year-over-year basis, however, profit saw a substantial increase, rising over fourfold from ₹4.8 crore. Operating revenue grew by 20% year-over-year and 5% quarter-over-quarter to ₹736.9 crore.
During the June quarter, Pine Labs processed a gross transaction value (GTV) of approximately ₹4.22 lakh crore (around $45 billion) and handled 201 million transactions. Management attributed the decline in margins to increased investments in cloud infrastructure, network upgrades, and artificial intelligence capabilities, including the development of its AI-based credit underwriting platform, SignalIQ.
Despite the quarterly profit slump, brokerage firm Citi maintained an 'Accumulate' rating for Pine Labs, noting that the company's growth aligns with market expectations. The firm revised its target price for the stock downwards from ₹235 to ₹215, acknowledging the short-term impact of strategic investments on profitability. These investments are aimed at enhancing AI capabilities and expanding product offerings in international markets.