Shares of Lenskart jumped 5% in Friday’s trade (November 28) amid a bullish call on the stock by global brokerage Jefferies and ahead of the company’s first earnings since listing in the Indian stock market.
Lenskart is slated to announce its second-quarter results on Saturday, November 29 — which could emerge as a make-or-break moment for the company amid concerns around its steep valuations and financials.
The shares of Peyush Bansal-led Lenskart had debuted at a near 3% discount earlier this month, on November 10, as against its IPO price of ₹402. Currently, Lenskart shares are up by 6% from this level, valuing the company at a whopping ₹74,000 crore.
Lenskart IPO was subscribed 28.26 times in total, NSE data showed.
Last evening, global brokerage Jefferies initiated coverage on the Lenskart stock, with a ‘buy’ tag and a target price of ₹500, as it believes the company has a strong growth potential in the underpenetrated and growing Indian eyewear market, wherein it holds a 5% stake.
Its vertically integrated omni-channel model ensures cost efficiency, rapid delivery, and superior customer experience, making Lenskart a stock to buy for Jefferies.
What to expect from Lenskart Q2 results?
The global brokerage expects Lenskart’s revenue CAGR of 24% over FY25–28E led by volume growth. Meanwhile, it pegs adjusted EBITDA growth at a CAGR of over 50% with margin expansion of 600 bps over the said period, led by operating leverage and international GM improvement. “Balance sheet is net cash, with rising return ratios and FCF,” it said.
For the financial year 2024-2025 (FY25), Lenskart reported a net profit of ₹297 crore on a revenue of ₹6,652 crore. However, it included a ₹167.2 crore FVTPL (fair value through profit or loss) gain related to the Owndays acquisition. Excluding this one-time item, the normalised profit stood at ₹130.1 crore, resulting in a modest 1.96% net margin, compared to the reported 4.24%, Bonanza analysts had noted at the time of the IPO opening.
As Lenskart prepares for its first post-listing report card, investors should focus on the sustainability of its profitability, specifically looking for stable EBITDA margins (around 14–15%) and revenue growth of 20–25% to justify its premium (~ 285x P/E) valuation, opined Santosh Meena, Head of Research at Swastika Investmart.
Nitin Jain, Sr. Research Analyst at Bonanza, said that investors should expect continued revenue growth around 20-25% year-over-year, building on Q1 FY26’s ₹1,894 crore top line and ₹61-62 crore profit, alongside margin improvements from store expansion and operational leverage, though high capex may cap returns.
A rise in the number of transacting customers is anticipated, as seen by the 4.43 million accounts in Q1 FY26, up from 3.41 million in the previous year, he said. Additionally, the company is likely to show growth in its physical store footprint, with the plan to use IPO funds to open more stores and expand its omnichannel strategy.
According to analysts, management commentary on customer acquisition cost, repeat order share, international business profitability and festive-season momentum will likely dictate market reaction.
How to trade Lenskart stock ahead of earnings?
Given concerns around Lenskart’s valuations, analysts advise caution ahead of earnings, making the recently-listed stock a better bet for investors with a high risk appetite.
The stock is “priced for perfection,” meaning even a slight miss on margins or international growth could trigger a sharp correction, warned Meena.
Therefore, he advised that only aggressive investors can consider taking a small tracking position at current levels to capture breakout potential, but conservative investors are better advised to wait until after the results to confirm the financial turnaround is structural and not just “dressed up” for the IPO.
He said the better strategy is to wait for clarity on post-IPO execution—store-level productivity, margin stability, cash-flow conversion and progress on expansion capex, even as the long-term story for Lenskart remains compelling.
Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.
