Shares of Lenskart Solutions Ltd witnessed a significant surge during early trading on Friday, climbing nearly 4% after global brokerage firm Jefferies assigned a bullish 'Buy' rating to the recently listed stock.
Market Reaction and Brokerage Outlook
In early trade, Lenskart shares gained as much as 3.86% to reach ₹423.45 per share on the BSE. This positive movement came directly after Jefferies initiated its coverage on the eyewear retailer with a strong 'Buy' recommendation and set a target price of ₹500 per share.
According to Jefferies' analysis, this target price suggests an upside potential of nearly 23% from the stock's previous closing price. The brokerage firm values Lenskart at 50 times its FY28E pre-Ind AS EBITDA, positioning it broadly in-line with other high-growth Consumer and Internet companies.
Lenskart's Market Position and Growth Strategy
Lenskart Solutions stands as India's largest organized eyewear retailer and ranks among the top two players across Asia. The company operates through an omnichannel model that features deep vertical integration spanning design, manufacturing, and retail operations.
India remains the core profit engine for Lenskart, contributing over 85% of its EBITDA. However, the company's international expansion across more than 10 countries through both organic entry and strategic acquisitions adds significant strategic optionality for future growth.
Substantial Market Opportunity
Jefferies highlighted the enormous potential in India's eyewear market, which they value at $9 billion in FY25. This market remains underpenetrated and is growing at an impressive 13% compound annual growth rate (CAGR).
Despite Lenskart's leadership position in organized retail, which currently has around 24% penetration and is rising, the brokerage noted that Lenskart's current share represents just 5% of the overall market, indicating substantial headroom for future expansion.
The company's vertically integrated omnichannel model ensures cost efficiency, rapid delivery capabilities, and superior customer experience—key competitive advantages in the evolving retail landscape.
Financial Projections and Performance
Jefferies expects Lenskart to deliver robust financial performance in the coming years. They project the company will achieve a revenue CAGR of approximately 24% over FY25-28E, primarily driven by volume growth.
More impressively, Adjusted EBITDA is estimated to grow at more than 50% CAGR with margin expansion fueled by operating leverage and international gross margin improvement. Earnings per share (EPS) is expected to grow at a 44% CAGR during this period.
Lenskart's balance sheet remains strong with net cash position, improving return ratios, and growing free cash flow generation.
Since its somewhat muted market debut on November 10, when Lenskart shares listed at ₹390.00 apiece on the BSE (representing a 2.99% discount to the issue price of ₹402 per share), the stock has shown recovery. From its listing price, Lenskart shares have gained 8.5%, and they've risen more than 5% from the original issue price.
By 9:35 AM on Friday, Lenskart share price was trading 1.12% higher at ₹412.25 per share on the BSE, maintaining the positive momentum initiated by Jefferies' optimistic assessment.
