'Buy Lenskart' is Macquarie's advice as it sees 29% upside

Shares of newly-listed Lenskart Solutions Ltd. will remain in focus on Friday, December 19, after brokerage house Macquarie initiated coverage on the stock. Macquarie has assigned an 'Outperform' rating with a price target of ₹530 per share, implying an upside of nearly 29% from Thursday's closing price.

The brokerage described Lenskart as India's leading eyewear retailer with a fully integrated supply chain, which provides a competitive edge in costs, design and operating efficiency compared with peers.

According to Macquarie, Lenskart's proven track record of industry leading growth strengthens the outlook for market share gains, with its current 5% share having the potential to move closer to the 40% plus levels seen in more mature global markets.

The brokerage added that better utilisation of the supply chain could lift store level EBITDA margins to around 33% and more than triple return on invested capital to over 20% over FY26 to FY28.

Earlier, on December 15, Morgan Stanley also initiated coverage on Lenskart with an 'Equalweight' rating and a price target of ₹445. The brokerage termed Lenskart a differentiated play on evolving lifestyle trends and said the company is relatively insulated from broader macroeconomic headwinds.

Morgan Stanley added that Lenskart has the potential to emerge as an EssilorLuxottica like global eyewear leader from India, backed by its market leadership and fully integrated business model.

Jefferies has also initiated coverage on the stock with a 'Buy' rating and a price target of ₹500.

In its first quarterly results post listing, Lenskart reported a 21% year on year increase in revenue, while EBITDA rose 45%. The India business grew 13%, while international operations expanded 33% from a year earlier.

The company expects both revenue and EBITDA to improve further in the third quarter and is targeting over 450 net store additions across India.

Shares of Lenskart Solutions closed Thursday's session at ₹411, up 1.66%, and continue to trade above their IPO price of ₹402 per share.