Emkay Initiates Coverage, Bets On Lenskart’s High Valuations — Check Target Price

Emkay Global Financial Services has initiated coverage on Lenskart Solutions with a Buy rating and a target price of Rs 525. This is based on a Discounted Cash Flow (DCF)-implied multiple of 56x Dec-27E EBITDA.

While acknowledging that valuations may appear optically high, the brokerage argues that Lenskart’s growth visibility, superior unit economics and scalable business model justify a premium.

The bullish stance is anchored in strong macro tailwinds for the Indian eyewear market, estimated at $900 crore. Emkay highlights structural drivers such as a 700 basis point GST cut, rising incidence of refraction errors, and eyewear increasingly being treated as a fashion accessory.

Together, these factors are expected to drive an ~13% industry CAGR, as per Redseer estimates.

Lenskart, with an estimated 5% market share, is India’s largest eyewear retailer and is positioning itself as a global player. Emkay points to technology being deeply embedded across the value chain as a key differentiator.

Automation and vertical integration at the back end help control costs, while remote optometry, virtual try-ons, geo-analytics and Vision AI enhance front-end execution, including store location selection and merchandising.

These capabilities are already translating into strong operating metrics. Lenskart is delivering 15–16% same-store sales growth, offers next-day delivery across 58 cities, and plans to add 450 stores in FY26E.

The brokerage also notes the company’s leadership in overseas markets such as Singapore and Dubai, reinforcing its global ambitions.

A central pillar of Emkay’s thesis is Lenskart’s unit economics. The company enjoys a store-level payback of under one year, driven by high revenue throughput and relatively low capital requirements of about Rs 50 lakhs per store.

Vertical integration supports gross margins of ~64% in India, significantly higher than most discretionary retail peers. Within eyewear, Lenskart’s scale is already over three times that of the next-largest player, Titan Eyewear.

On growth and profitability, Emkay expects Lenskart to achieve a ~6x revenue scale-up in India over the next decade, implying a ~20% CAGR. A gradual shift toward company-owned, company-operated stores, along with operating leverage as head-office costs normalise.

In the medium term (FY25–28E), Emkay forecasts ~25% revenue CAGR and ~50% EBITDA CAGR, well ahead of the 12–26% growth expected for other leading retail players. Additional upside could come from optionalities such as managed vision care, audiology, paid comprehensive eye tests, and AI-led smart eyewear. With ~Rs 4,000 crore in net cash, Emkay believes Lenskart is well capitalised to pursue these opportunities.

Of the analysts, who cover this stock, and are tracked by Bloomberg, four (including Emkay) have a 'buy' rating, one has a 'hold' stance, and one has a 'sell' call on the stock.