Pine Labs' India unit reports Rs 1,317 crore revenue in FY24; losses jump 234%

The India unit of Pine Labs, a leading fintech and merchant commerce platform, reported a slight increase in revenue for the fiscal year ending March 2024 (FY24).

The fintech unicorn's operating revenue rose by 2.8% to Rs 1,317 crore compared to Rs 1,281 crore in FY23.

Despite this growth, total revenue, including sales from devices and other sources, reached Rs 1,384 crore, up marginally from Rs 1,328 crore in FY23.

However, the overall revenue growth remained flat, signalling a challenging year for the company.

Sharp increase in losses

While revenue growth stagnated, Pine Labs’ losses surged dramatically. The startup reported a net loss of Rs 187 crore in FY24, a significant jump from Rs 56 crore in the previous year, marking a threefold increase.

The rise in losses was primarily driven by higher operational costs, which climbed by 15.8% to Rs 1,624 crore.

Employee-related expenses were the largest contributor to this increase, accounting for 38.5% of total expenditures, with additional rises in legal, professional fees, and impairment costs.

Breakdown of revenue sources

Pine Labs generates a significant portion of its income from transaction processing and settlement services. In FY24, this segment accounted for Rs 805 crore, representing 61% of the company’s total operating revenue. This figure saw a modest growth of 1.5% compared to FY23.

Another notable revenue stream came from digitization and services provided at petroleum outlets, which brought in Rs 67 crore.

However, the startup's gifting solutions, including platforms like Qwikcilver and Pine Perks, saw a steep decline in income, dropping by 44.5% to Rs 111 crore.

Rising costs strain profitability

The company's rising costs were a key factor behind the widening losses. Employee benefits alone accounted for Rs 625 crore of the total expenditure, which included Rs 58 crore in non-cash ESOP (employee stock ownership plan) expenses.

Pine Labs also faced a 26% rise in impairment losses on trade receivables, amounting to Rs 537 crore, and a 37% increase in depreciation and amortization expenses, which totaled Rs 327 crore. These growing costs pushed the company's operating losses higher, straining its profitability.

Plans for future and relocation to India

Pine Labs, which is currently headquartered in Singapore, has received approval from the National Company Law Tribunal (NCLT) to relocate its legal base to India.

The startup is in the process of merging its entities in India and Singapore as part of this move. The relocation is expected to streamline operations and bring greater focus to the Indian market, where most of its revenue is generated.

Additionally, It has long been considering a public listing, though no official timeline for an IPO has been confirmed yet.