Pine Labs stock has fallen 29% below its IPO price. Despite a profitable quarter, the stock's decline continues. Analysts advise caution, citing weak market sentiment and elevated valuations. Investors are recommended to monitor the company's performance before investing. The stock's chart shows a downtrend, with potential for further dips. Long-term investors may hold, but fresh buying is discouraged for now.

Pine Labs correction deepens as stock slips 29% below IPO price. Why are analysts warning against bottom fishing?

Synopsis

Pine Labs stock has fallen 29% below its IPO price. Despite a profitable quarter, the stock's decline continues. Analysts advise caution, citing weak market sentiment and elevated valuations. Investors are recommended to monitor the company's performance before investing. The stock's chart shows a downtrend, with potential for further dips. Long-term investors may hold, but fresh buying is discouraged for now.

Investors who bought Pine Labs at the time of the IPO with a long term view are currently sitting at a 29% loss with the stock trading below the issue price of Rs 221. While the loss is notional, the correction comes amid weak market sentiments and experts see a further slip from current levels, recommending new investors refrain from bottom fishing.

The company debuted on the stock exchanges on November 14, 2025 at a 10% premium over the IPO price but later hit a high of Rs 284, implying gains of 29%. It has been downhill for the stock since then.

The stock has corrected despite the company posting a profitable quarter that ended December 31, 2025. The payment solutions company reported a consolidated net profit of Rs 42 crore in Q3FY26 versus a loss of Rs 57 crore in the year-ago period. Revenue from operations stood at Rs 744 crore in Q3FY26, rising 24% over Rs 602 crore in the corresponding quarter of the last financial year.

The company's profits jumped 600% sequentially compared to Rs 6 crore in Q2FY26, while the revenue saw a 15% uptick QoQ from Rs 650 crore in the July-September quarter.

Kranthi Bathini, Director-Equity Strategy at WealthMills Securities said recently listed IPOs have suffered amid dying euphoria in the domestic primary markets. The reason has been weak secondary markets. The majority of IPOs over the past year are now trading below their issue price amid valuation concerns as the economic outlook remains uncertain.

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NSE data reveals 133 issues are currently trading below their IPO price versus 219 that hit the D-Street over the past year. Of these, 82 companies reported listing-day losses.

Also read: Auto scrips skid up to 27% in 3 months. Check Q4 expectations and 13 stocks to buy

Share price performance

Pine Labs shares have declined 45% from the peak of Rs 284. Its share price has eroded 35% in 2026, with steepest sell-off of 18% coming in March - the period when Iran-Israel war was at its peak. While the war is not over, and global markets fear more downturn, talks of de-escalation between the warring factions emerge and die daily with the same alacrity.

What should investors do?

Despite corrections, Bathini still sees the valuation remaining "elevated" for Pine Labs. In his view, investors should watch the company's performance for the next few quarters before taking a bet.

Dr. Ravi Singh, Chief Research Officer from Master Capital Services said the stock's chart still looks weak, adding that the price action continues to show a clear downtrend with lower highs and lower lows. This means selling pressure is still dominant, he warned.

"In the near term, the setup remains negative, and unless we see a strong reversal, the stock could slip further. If it breaks below 150, there’s a high chance it drifts towards the 130 zone. In long term, the company remains well placed in the digital payments and merchant ecosystem, so this correction seems more sentiment-driven than fundamental. Long-term investors can continue to hold. Fresh buying should be avoided for now. A better entry would be if the stock manages to sustain above 174, which could signal a possible trend reversal," Singh said.

Nilesh Jain, Vice President - Head of Technical and Derivative Research at Centrum Finverse also recommended an "avoid" on the stock.

Also read: Q4 impact: Bank stocks slump up to 32% in 3 months, but brokerages bet on SBI, HDFC Bank, 6 more stocks. Check why

(Disclaimer: The recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times.)

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