Pine Labs Q3 Profit Hits ₹42.4 Crore, Revenue Jumps 24%

Introduction: A Profitable Turnaround

Fintech company Pine Labs has reported a significant financial turnaround, posting a consolidated net profit of ₹42.4 crore for the third quarter ending December 31, 2025. This result marks a sharp reversal from the ₹56.7 crore loss recorded in the same period of the previous fiscal year. The performance underscores the company's growing operational leverage and improved financial health, achieved even as it absorbed a one-time charge related to new labour regulations.

Strong Revenue and Operational Performance

The company's robust profitability was driven by strong top-line growth. Revenue from operations for Q3 FY26 rose by 23.7% year-on-year to ₹744 crore, up from ₹602 crore in Q3 FY25. This growth reflects increased transaction volumes and successful monetization of its merchant network. Sequentially, the net profit grew seven-fold from ₹5.97 crore reported in the second quarter of FY26, highlighting accelerating momentum.

Operational efficiency saw marked improvement. Earnings Before Interest, Taxes, Depreciation, and Amortisation (EBITDA) surged by 70% year-on-year to ₹131.5 crore from ₹77 crore a year ago. Consequently, the EBITDA margin expanded significantly to 17.7% in the December quarter, a substantial increase from 12.8% in the corresponding period last year.

Record Transaction Volumes and Merchant Growth

The festive season provided a strong tailwind for Pine Labs, which processed its highest-ever quarterly Gross Transaction Value (GTV) of $11 billion on its platform. This record volume indicates heightened consumer spending and the company's expanding reach. The firm's merchant base grew to 1.05 million as of Q3 FY26, up from 0.92 million a year prior. The number of digital checkout points also increased by 11% to 1.93 million, demonstrating the continued expansion of its physical and digital infrastructure.

Impact of New Labour Code

While the operational performance was strong, the bottom line was affected by a one-time charge of ₹23 crore. This expense was provisioned to comply with new labour codes notified in November 2025, which required a restructuring of employee benefits. The company clarified that without this exceptional item, its net profit would have been higher. Employee benefit expenses remain the largest cost component for Pine Labs, constituting over 37% of total expenses for the quarter.

Financial Performance Summary

Cash Flow and Working Capital

For the quarter, Pine Labs reported an operating cash flow of ₹124 crore, excluding early settlements. The company noted that the quarterly movement in working capital was primarily driven by higher transaction volumes during the festive season. Management expects this to normalize in the upcoming quarter as seasonal demand subsides.

Market Reaction and Valuation

Despite the strong earnings report, the market response was muted. Shares of Pine Labs Ltd. traded just 0.083% higher at ₹228.90 following the announcement. The stock has declined approximately 3% year-to-date in 2026. This tepid reaction suggests that investors are balancing the positive operational turnaround against the company's valuation, which stands at a market capitalization of around ₹26,736 crore. The focus for the market appears to be on the sustainability of profits rather than a single quarter's performance.

Competitive Landscape and Outlook

Pine Labs operates in a highly competitive fintech sector in India, with major players like Paytm and Razorpay. In the point-of-sale segment, it competes with global firms such as VeriFone and Ingenico. While its recent profitability is a positive sign, its valuation is being closely watched relative to larger peers like PB Fintech and Paytm. Analysts remain cautiously optimistic, with an average 12-month price target of ₹262.50, suggesting potential upside. The company's future growth will likely depend on its ability to capitalize on the industry shift towards value-added services like credit-led monetization and embedded finance.

Conclusion

Pine Labs' third-quarter results demonstrate a successful shift to profitability, backed by solid revenue growth and improved operational efficiency. The performance is a clear indicator of the company's strengthening fundamentals. However, the one-time labour code impact and a subdued market reaction highlight the challenges ahead. Investors will be closely monitoring whether Pine Labs can maintain this profitability trajectory and justify its valuation in a competitive market.