Shares of Lenskart Solutions experienced a significant increase of over 5% on Monday, driven by the company’s robust second-quarter earnings report. This uptick in share price followed a positive assessment from global brokerage Jefferies, which has assigned a ‘Buy’ rating to the stock and set a target price of Rs. 500. This target suggests a potential upside of nearly 23% from the current trading levels. In a more optimistic scenario, Jefferies anticipates the stock could reach Rs. 560, indicating a possible rise of 38%.
Lenskart reported impressive financial results for the July to September quarter, highlighting a year-on-year net profit increase of 19.7%, reaching Rs. 102.2 crore, compared to Rs. 85.4 crore in the same period last year. Sequentially, this represents an increase of 70.3%, reflecting significant growth compared to the first quarter of the fiscal year. Notably, the company eliminated exceptional losses this quarter, a marked improvement from the previous quarter’s Rs. 10.4 crore loss.
Revenue also demonstrated strong growth, amounting to Rs. 2,096 crore, which is a 20.8% increase year-on-year and a 10.6% increase quarter-on-quarter. Both the online and offline segments contributed to this demand, reaffirming the effectiveness of Lenskart’s hybrid operating model.
Analyst Outlook and Market Potential
Jefferies emphasized the potential for growth in Lenskart, noting that it currently holds only a 5% share of the $9 billion Indian eyewear market. This limited presence presents a substantial opportunity for expansion, particularly as organized retail continues to increase its market share. The brokerage highlighted that Lenskart operates a vertically integrated business model that encompasses manufacturing and both online and offline retailing. This structure enables the company to maintain control over costs, enhance delivery timelines, and standardize customer experiences.
More than 85% of Lenskart’s earnings before interest, taxes, depreciation, and amortization (EBITDA) is derived from the Indian market. Jefferies projects that the domestic market will continue to be the primary driver of growth, while Lenskart expands its international presence in regions like Europe and Asia. This international expansion is expected to become a significant contributor to the company’s long-term growth trajectory.
Future Growth Projections
Looking ahead, Jefferies estimates that from fiscal year 2025 to 2028, Lenskart‘s revenues will grow at a compound annual growth rate (CAGR) of 24%. This growth is anticipated due to increased repurchase rates and deeper market penetration. Adjusted EBITDA is expected to rise at over 50% CAGR, driven primarily by enhanced operating efficiency and margin expansion. Earnings per share are projected to grow at a remarkable 44% CAGR, with the company maintaining a net-cash balance sheet.
On Monday, Lenskart‘s stock reached an intraday high of Rs. 432.50 on the National Stock Exchange (NSE), reflecting a gain of over 5%. Since its listing on November 10 at Rs. 395, the stock has climbed more than 7% above its issue price. This performance underscores strong investor confidence in Lenskart‘s fundamentals, expanding market presence, and the favorable outlook from analysts, reinforcing its position as a key player in India’s rapidly evolving eyewear market.
