Pine Labs Clarifies Profit Streams in Response to Media Reports on Gift Card Income

Pine Labs Clarifies Profit Streams in Response to Media Reports on Gift Card Income​

Pine Labs Ltd has issued a clarification addressing reports published by entrackr.com regarding its profit structure and gift card income stream. The company stated that the media reports are speculative, incorrect, and misleading concerning the flow of breakage income within its operations.

The clarification highlights that Pine Labs operates primarily through co-branded program structures. Under these arrangements, any breakage income is allocated to the partner brand rather than being a revenue source for Pine Labs. Consequently, breakage has never been a material component of Pine Labs' profit pool or revenue.

Pine Labs explained that as part of these established cobranded agreements, unutilized balances are retained by the brand partner. These partners typically utilize those funds for customer acquisition and engagement, loyalty initiatives, and driving repeat usage.

The company noted that this operational model has been consistently implemented across Pine Labs' regulated co-branded programs in India for more than a decade.

Looking ahead, Pine Labs stated that even if regulatory guidance is introduced regarding the treatment of breakage income by the Reserve Bank of India (RBI), the company does not foresee any meaningful impact on its revenue or profitability, as such income has never been recognized in Pine Labs' Profit and Loss account.

PINELABS Stock Price Movement​

As of 12:27 PM, shares of Pine Labs Limited are slipping by 1.62% in live trading, currently at ₹151.10. The stock has witnessed significant activity, with over 41 million shares changing hands during morning trading.