Lenskart shares gain 11% post strong Q3 results; Jefferies raises target price

Shares of Lenskart Solutions Ltd. gained 11% on Thursday, February 12, after the company reported a strong performance in the third quarter, resulting in brokerage firm Jefferies increasing its price target by around 11%.

The company's operating leverage has begun to play out.

Its profit after tax increased to ₹132.7 crore from ₹1.85 crore in the previous year.

The company's revenue increased 38.3% to ₹2,307.7 crore from ₹1,668.8 crore in the third quarter last year.

Lenskart's earnings before interest, tax, depreciation and amortisation (EBITDA) increased 118.9% to ₹464.1 crore from ₹212 crore in the previous year.

Its margins expanded to 20.1% from 12.7% in the year-ago period.

The company's India revenue increased 36.8% to ₹1,385.2 crore from ₹1,012.9 crore in the previous year. It reported an EBIT of ₹160.8 crore, up 234.3% from the previous year's ₹48.1 crore. The company's India margins expanded to 11.6% from 4.7% in the year-ago period.

Meanwhile, Lenskart's international revenue increased 39.9% to ₹935.9 crore from 668.9 crore in the previous year. Its EBIT increased to ₹32.5 crore in the third quarter compared to a loss of ₹42.4 crore in the previous year. Its margin was 3.5%.

Lenskart's profit after tax increased 28% from the previous quarter. its revenue and EBITDA also increased sequentially by 10% and 12%, respectively.

Its India business delivered a 27.8% same store sales growth (SSSG) and 35.8% same pin-code sales growth in the December quarter.

The India eyewear unit sales increased 29.7% in the quarter under review ASP expansion was of 7% driven by premiumisation.

Jefferies sees nearly 22% upside

Jefferies has a 'buy' rating on the Lenskart stock and has raised its target price to 575 per share from 520 apiece. This implies a potential upside of 21.6% from its previous close.

Jefferies said Lenskart delivered an exceptional quarter, with strong growth and smart margin expansion across India and international markets.

It said the management commentary was even more compelling, as it highlighted a clear focus on long-term growth over short-term margin maximisation, with margins seen as an outcome rather than the objective.

The analyst said the shareholder letter stood out for its clarity and transparency, reinforcing confidence in execution and governance.

Jefferies has raised its adjusted EBITDA estimates by 6-9%.

Of the 11 analysts that have coverage on the stock, nine have a 'buy' rating, two have a 'hold' rating and one has a 'sell' rating.

Shares of Lenskart Solutions were up 11% at ₹518.5 apiece just after market open on Thursday.

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