Lenskart has caught the attention of global brokerage Jefferies, which has now initiated coverage on the recently listed eyewear player. The firm has issued a ‘Buy’ rating and set a target price of Rs 500. This implies a potential upside of 23% from the current market price, according to the brokerage report.
The brokerage house believes that the company’s structure, growth model and expansion strategy create a case for steady earnings over the next few years.
Let’s take a look at the three factors behind its view, ranging from domestic market strength to global expansion and financial expectations.
Jefferies on Lenskart: India remains Lenskart’s core strength
According to the brokerage report, Lenskart still holds a small share of India’s large eyewear market. As the report noted, “Lenskart, India’s largest tech-driven eyewear retailer, holds just 5% market share, offering strong growth potential.”
Jefferies highlighted that the company’s operating model-spread across online channels, retail stores and in-house manufacturing allows it to keep costs under control and deliver products faster. This structure also helps the company maintain better customer engagement.
The brokerage further in its report added that the Indian market continues to be the foundation of Lenskart’s business, contributing more than 85% to its operating profit. The combination of scale and demand gives the retailer a long-term runway, as eyewear usage in India continues to increase.
Jefferies on Lenskart: International expansion adds another layer of growth
Lenskart’s presence now spans more than ten countries. Much of this expansion has come through both organic entry and acquisitions such as Owndays in Asia and Stellio/Meller in Europe.
The brokerage report added, “While investors often view the international foray with skepticism given the track record of Indian firms, we see a strategic rationale for Lenskart.”
Even though markets abroad grow at a modest pace of “3-7%”, Jefferies believes there is scope for Lenskart to capture more market share. It also expects better margins in international operations as the company continues to integrate its systems and improve efficiencies across global markets.
Jefferies on Lenskart: Strong financial visibility over the next three years
According to the brokerage report, Lenskart’s financial outlook appears strong. Jefferies estimates that revenue will grow at around 24% between the financial year 2025 and financial year 2028. The increase is expected to be driven by transaction growth and higher customer frequency.
The report noted, “Attractive unit economics and fast paybacks should drive 50%+ adj. EBITDA CAGR FY25-28E.” It also mentioned that operating profit margins could rise by 600 basis points during the same period, largely due to operating leverage and improved gross margins in international markets.
Earnings Per Share (EPS) are expected to grow at nearly 44% annually, with the company maintaining a net-cash balance sheet.