Motilal Oswal Financial Services has initiated coverage on Lenskart Solutions with a ‘Buy' rating and a target price of Rs 600, implying a potential upside of about 27% from current levels. The brokerage expects the eyewear retailer's vertically integrated model, omnichannel scale, and strong store economics to drive sustained revenue and profitability growth over the medium term.
Motilal Oswal highlighted that Lenskart operates in a structurally underpenetrated category, with about 53% of India's population requiring vision correction but only around 35% penetration of prescription eyewear. This gap, combined with low organised retail presence, creates a large growth runway for branded players.
Strong Growth Outlook
Motilal Oswal expects Lenskart to deliver robust financial growth, projecting a revenue CAGR of about 25% and pre-Ind AS EBITDA CAGR of around 53% over FY25–28. The expansion will be driven by accelerated store additions, volume growth, and improving product margins supported by backward integration.
Lenskart's store economics remain a key strength, with store-level EBITDA margins of about 33% and a payback period of roughly 10 months. The brokerage also expects the company to add over 1,400 stores in India during FY25–28, supported by strong demand in tier-2 and tier-3 cities and continued category formalisation.
Operating leverage is expected to further enhance profitability, with margins benefiting from higher scale, centralised manufacturing, and increasing share of in-house production.
Support by Competitive Advantage
Motilal Oswal acknowledged that Lenskart trades at a premium compared to other retail peers but believes the valuation is justified by its superior growth profile, strong market positioning, and scalable business model. The brokerage's valuation is based on a discounted cash flow approach, implying a multiple of about 55x FY28 estimated EBITDA.
The brokerage estimates Lenskart's total addressable market at over Rs 2.3 lakh crore across its operating geographies, while its market share remains relatively low, indicating significant headroom for expansion. As India's largest vertically integrated eyewear platform, Lenskart, the brokerage says, is well positioned to capture this opportunity through its scale, technology-led operations, and broad product portfolio.
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