Profit rose 40.03% even as operating profit fell 19.36%
Lower interest and tax costs lifted net profit, but operating margin fell 2.54 percentage points as expenses declined more slowly than revenue.
Filed 25 May 2026, 17:41 IST · after market close · Pine Labs Ltd (PINELABS)
Key takeaways
- Consolidated net profit rose 40.03% QoQ even as operating profit fell 19.36%.
- The operating margin narrowed by 2.54 percentage points to 15.19% because revenue fell 5.88% while expenses declined only 2.97%.
- Other income contributed 72.83% of pre-tax profit, while the tax rate fell 19.00 percentage points to support reported profit growth.
Price around the results
Revenue momentum weakened in Q4FY26
Pine Labs reported consolidated revenue of Rs 700.51 cr in Q4FY26, down 5.88% QoQ, while operating profit declined 19.36%. Management said non-electronics volumes grew more than 41% YoY in Q4 and pointed to continued expansion in mid-market and smaller merchants.
Costs squeezed operating margin, while below-the-line items helped
Expenses fell 2.97%, less than the 5.88% revenue decline, which reduced operating margin by 2.54 percentage points. Interest costs fell 30.79%, but other income rose 114.83% and accounted for 72.83% of pre-tax profit. The tax rate dropped from 32.23% to 13.23%, so the 40.03% rise in net profit was aided by lower financing and tax costs rather than operating profit growth.
Margin recovered from Q2 but slipped after the Q3 peak
Operating margin rose from 11.60% in Q2FY26 to 17.73% in Q3FY26 before easing to 15.19% in Q4FY26. Pine Labs' margin was 44.22 percentage points below the 59.41% median for 52 reported Financial Services peers, placing it sixth from the bottom. Management said it remains committed to further leverage in employee costs, while also flagging that higher deployments and hardware costs linked to the global chip shortage may moderate depreciation leverage.
Management highlighted merchant, international and airline expansion
Management said mid-market and smaller-merchant growth had reached 30% YoY and expected that growth to continue. It also said Malaysia revenue was expected to grow by 50%, while the company's direct-acquiring footprint was expanding across Malaysia, Singapore and Dubai. The presentation said 20 airlines were live through Amadeus, with a path to more than 50.
Shares fell after the results, with heavy trading
The stock fell 5.65% on the first trading day after the filing, with a 7.98 volume ratio. The move was -2.16% after five sessions, +4.05% after 15 sessions and -1.99% after 30 sessions.
Q4FY26 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q4FY26 | Q3FY26 | QoQ |
|---|---|---|---|
| Revenue | ₹701 cr | ₹744 cr | -5.88% |
| Other income | ₹50 cr | ₹23 cr | +114.83% |
| Expenses | ₹594 cr | ₹612 cr | -2.97% |
| Operating profit | ₹106 cr | ₹132 cr | -19.36% |
| Operating margin (%) | 15.19% | 17.73% | — |
| Interest | ₹17 cr | ₹24 cr | -30.79% |
| Depreciation | ₹71 cr | ₹68 cr | +4.05% |
| Profit before tax | ₹68 cr | ₹63 cr | +9.37% |
| Tax | ₹9 cr | ₹20 cr | -55.11% |
| Net profit | ₹59 cr | ₹42 cr | +40.03% |
| EPS (₹) | ₹0.52 | ₹0.38 | +36.84% |
Operating margin of 15.19% compares with a Financial Services sector median of 59.41% across 52 peers that have reported Q4FY26.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | -5.65% | -5.16% |
| Next session | -0.25% | — |
| 5 sessions | -2.16% | +0.44% |
| 15 sessions | +4.05% | — |
| 30 sessions | -1.99% | — |
Volume on the results session was 7.98× its 20-day average.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- Non-electronics volumes grew more than 41% year on year in Q4.
Guidance & outlook
- Pine Labs expects mid-market and smaller merchant growth to continue after 30% YoY growth.
- Pine Labs expects Malaysia revenue to grow by 50%.
- Pine Labs sees a path to serving more than 50 airlines through Amadeus.
- Pine Labs sees no structural ceiling on its margin expansion trajectory.
- Management remains committed to further leverage in employee costs.
Expansion
- Pine Labs is expanding its direct acquiring footprint across Malaysia, Singapore and Dubai.
- Pine Labs expanded its international presence through GCash acquiring, Wio Bank and Emirates NBD contracts, and new airline partnerships.
- Pine Labs expanded Emirates NBD's partnership into Saudi Arabia and Egypt.
New orders
- Pine Labs won a multi-year acquiring processing contract from Wio Bank in the UAE.
- Pine Labs received contracts from India's top three oil marketing companies.
New initiatives
- Pine Labs partnered with OpenAI for agentic commerce solutions.
Problems & risks
- Pine Labs expects leverage from depreciation to moderate as deployments increase and hardware costs rise amid the global chip shortage.
What to watch
- Whether operating margin recovers from 15.19% after the Q4FY26 decline.
- Whether other income remains as large as 72.83% of pre-tax profit.
- Progress against management's stated 50% Malaysia revenue-growth expectation.