- Morgan Stanley maintains overweight rating on Lenskart with a higher price target of Rs 718
- Fiscal 2027-2030 revenue and earnings estimates raised by up to 7% reflecting strong performance
- India revenue estimates steady; EBITDA margin forecast increased by 20-40 basis points
Morgan Stanley remains bullish on Lenskart Solutions Ltd. and has revised its price target, along with its earnings estimates. The brokerage maintained an 'overweight' rating on the stock, citing a revised risk-reward scenario.
MS has raised its fiscal 2027 to 2030 consolidated revenue and earnings forecasts by 0-2% and 3-7%, respectively. For India, revenue estimates remain unchanged, but we EBITDA margin estimates have been raised by 20-40 basis points to factor in the strong performance so far.
The company's overseas market falls on the greener patch of grass as the brokerage has raised revenue estimates by 1- 5% for F27-F30 to factor in stronger performance registered recently.
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Morgan Stanley now builds in 24% revenue growth in F27 and 19% in fiscal 28 to fiscal 30. The estimates of EBITDA margin for the international market have also been increased by 20-40 basis points over the next four years.
The target price for Lenskart has been hiked from Rs 666 to Rs 718 based on the improved earnings projections. The new TP implies an upside of 6.53% from the last closing price.
"We have raised our price target and still see upside," the brokerage noted while citing a superior business model and robust scalability.
All Eyes On Scale, Stock, And Macro Headwinds Shield
Explaining its overweight thesis, the brokerage delved into Lenskart's business model and room for growth through full vertical integration.
Lenskart's strategic focus on full vertical integration in manufacturing, its robust supply chain and advanced technology, combined with operational efficiency in store expansion and customer engagement, position it as a superior business model capable of competing successfully both locally and globally," Morgan Stanley underlined.
The brokerage added that Lenskart remains largely insulated from macro headwinds, while being a distinctive play on shifting lifestyle dynamics. If executed properly, MS outlined, the company could achieve global scale with high profitability.
"With a strong F26 performance, we believe the company has raised the bar for growth projections, which should support stock outperformance," Morgan Stanley stated in its research report.
Lenskart Q1 FY27
Lenskart's net profit saw a 270% leap, or a 4x jump in its net profit to Rs 222 crore, according to financial results data for the first quarter of fiscal 2026-27, according to an exchange filing from the company in August. The firm's profit for the previous year was Rs 60 crore.
The company's revenue was up 43% to Rs 2,714 crore, compared to Rs 1,894 crore in the year-ago period. The Ebitda (earnings before interest, taxes, depreciation and amortisation) saw a 76% jump to Rs 588 crore, compared to Rs 335 crore in the year prior. The Ebitda margin expanded to 21.7% to 17.7%. The first quarter of fiscal 2026 saw a one-time loss of Rs 10.4 crore.
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