Originals · Startup · Startups & Fintech
Pine Labs' Q2 profit jumps over 6X and it bets on UPI fees with 10 lakh more soundboxes
Operating revenue rose 24% to Rs 806.2 crore. The payments company says most of its UPI value comes from payments above Rs 2,000, the line where NPCI's new merchant fee will apply.
Pine Labs reported operating revenue of Rs 806.2 crore for the September quarter of FY27, up 24% year on year and 9% on the previous quarter, according to results published on October 29. Net profit rose to Rs 38.6 crore from Rs 6 crore a year earlier, and roughly doubled from Rs 19.6 crore in Q1, Inc42 reported. Total expenses grew 16% to Rs 770.4 crore, so revenue outran costs. For the first half of FY27, Entrackr reported operating revenue of Rs 1,543 crore and profit of Rs 99 crore.
Adjusted EBITDA rose 27% to Rs 215.5 crore, a 19.2% margin, and operating cash flow doubled to Rs 350 crore, with net cash of Rs 2,345 crore at the end of September. In the quarter Pine Labs processed about Rs 4.45 lakh crore in gross transaction value across 229 crore transactions, its merchant base grew 13% to 11.6 lakh, and its AI-based credit underwriting platform SignalIQ was handling more than 1.25 lakh loans a month. CEO Amrish Rau said 15% of revenue came from global markets and 14% from products launched in the last two years, YourStory reported, and the company said its UAE business crossed one lakh daily transactions.
The bigger signal was on UPI. NPCI has notified a 0.4% merchant discount rate on person-to-merchant UPI payments above Rs 2,000, deferred to a date after Diwali. Pine Labs said more than 70% of transactions at its checkout points are UPI-led and more than 65% of its UPI value comes from payments above Rs 2,000, and it expects to earn its share through acquiring bank partners. Rau said the acquiring bank's share of the 40 basis point cap is expected to be around 11 basis points.
To capture more of that, Pine Labs plans to deploy an additional 10 lakh soundboxes, aimed at merchants that use its card machines but a competitor's soundbox. Rau said soundboxes had not been a priority because UPI did not earn the company money before. He also said Pine Labs will need individual talks with its largest clients before passing on the fee, and that the start date is "completely in NPCI's court".
