Lenskart Delivers Strong Q3 Performance, Stock Soars to New High
The December quarter (Q3FY26) marked a significant milestone for Lenskart Solutions Ltd, serving as its first major performance test since its high-profile initial public offering in November 2025. The eyewear retailer reported a staggering 240% year-on-year increase in consolidated net profit, reaching approximately ₹131 crore. This impressive growth, while partly attributed to a modest base of ₹39 crore in the same period last year, underscores the company's robust operational momentum.
Revenue and Operational Highlights
Lenskart's revenue surged by 38% year-on-year to ₹2,308 crore, driven primarily by volume expansion and the addition of new customers. The company's Ebitda nearly doubled to ₹462 crore, benefiting from operating leverage as it scales its operations. In response to these strong results, the stock price soared by around 10% on Thursday, hitting a new 52-week high of ₹527.30. This rally has contributed to a total post-listing gain of 25%, reflecting investor confidence in the company's growth trajectory.
Store Expansion and Volume Growth: Volumes grew by 30% compared to Q3FY25, supported by the opening of 195 net new stores. Lenskart has maintained healthy same-store sales growth, thanks in part to its GeoIQ AI algorithm, which optimizes store locations to maximize catchment areas while minimizing cannibalization. The management emphasizes the importance of eye testing services to penetrate fragmented and underserved markets in tier-2 cities and beyond. In Q3, Lenskart conducted 63 lakh eye tests, a 54% increase year-on-year, with new stores in tier 2+ cities generating higher monthly revenue than those in metro areas.
Challenges and Competitive Landscape
Despite the positive results, the outlook is not without challenges. Competition in the eyewear space remains intense, with local firms posing a persistent threat. Lenskart's strategy of primarily company-owned, company-operated stores and vertically integrated manufacturing has enabled cost control and quality consistency. However, maintaining these advantages in the face of rising competition will be crucial for long-term success.
International Operations: Lenskart's international business, which accounts for about 40% of its revenues, grew by 33% year-on-year. However, constant-currency growth was more subdued at 24%, and this segment continues to be margin-dilutive. With 705 stores internationally, scale and operating leverage have yet to fully materialize, resulting in a pre-IndAS Ebitda margin of 6%, compared to 15% in India. While Lenskart has secured the number one brand position in Singapore, replicating this success in markets like Japan, Thailand, and the Middle East may prove challenging due to cultural and supply-chain complexities.
Valuation and Future Prospects
The stock is currently priced at 127 times FY27 price-to-earnings based on Bloomberg data, a valuation that may give investors pause. The total addressable market for organized eyewear companies is massive, driven by an ageing population and growing awareness of eye care. However, future earnings upgrades for Lenskart will critically depend on its ability to sustain the growth and margin expansion demonstrated this quarter. The management expects premiumization to further enhance margins with scale, although benefits from high-margin brands like Owndays and Meller are currently being passed back to consumers through initiatives such as the 'new lens replacement' campaign.
In summary, Lenskart's Q3 results have transitioned the company from promise to proof, with solid financials and stock performance. Yet, the focus now shifts to sustaining this momentum amid competitive pressures and international challenges, as the eyewear market continues to evolve.
