Lenskart Share Price: Emkay sees 6x revenue growth potential over next decade

Shares of Lenskart Solutions Ltd. will continue to be in focus on Tuesday, December 30, as it has received a bullish initiation from Emkay Global Financial Services, with the brokerage flagging strong long-term growth visibility driven by industry tailwinds, technology-led execution, and improving profitability.

Emkay initiated coverage on the stock with a 'Buy' rating and a price target of ₹525 per share, implying an upside of about 16% from current levels.

Emkay said the Indian eyewear market, estimated at $9 billion, is set for sustained expansion, aided by favourable macro factors such as a 700 basis points GST cut, rising refraction-related issues, and growing acceptance of eyewear as a fashion accessory.

These drivers are expected to support an industry CAGR of around 13%, according to Redseer estimates.

The brokerage said that Lenskart is India's largest eyewear retailer with a market share of about 5%, and has ambitions to build a global eyewear platform.

Technology remains central to its strategy, spanning backend automation and vertical integration, remote optometry and virtual try-ons at the consumer interface, and the use of geo-analytics and Vision AI for store expansion and merchandising decisions.

As the business scales up, Emkay believes these competitive advantages are translating into better operating metrics, including same-store sales growth of 15-16%, faster deliveries with next-day service available across 58 cities, and rapid network expansion, with around 450 store additions expected in FY26E.

The brokerage also said that Lenskart has already gained meaningful traction in international markets such as Singapore and Dubai.

Lenskart's store economics were described as attractive, with an average store-level payback of about 10 months, backed by high throughput and relatively low capital intensity. Emkay said this compares favourably with leading discretionary retail peers.

While acknowledging that valuations appear optically expensive following the recent turnaround in profitability, Emkay said there is scope for nearly 6x revenue growth in India over the next decade, translating into a 20% CAGR.

The brokerage added that a gradual shift toward company-owned, company-operated stores and operating leverage from growth investments could drive an average annual margin expansion of about 150 bps, supporting an EBITDA CAGR of 30% over the same period.

In the medium term, Emkay expects Lenskart to significantly outperform peers. Over FY25-28E, the brokerage forecasts revenue and EBITDA CAGRs of 25% and 50%, respectively, compared with 12-26% for other major retail players.

It also pointed to scalable optionalities within the business that could further strengthen medium-term prospects.

Within the eyewear segment, Emkay said Lenskart remains the clear leader, with more than three times the scale of the next largest player, Titan Eyewear. Most competitors, it said, are focused on third-party premium brands, which account for only about 5% of the Indian eyewear market by volume.

A strong balance sheet with net cash of around ₹4,000 crore further supports the company's expansion plans, according to the brokerage.

Currently, six analysts track the stock, with four recommending a 'Buy', while one analyst each has a 'Hold' and 'Sell' rating.

Shares of Lenskart Solutions are up 12.4% from their issue price of ₹402, although the stock has corrected nearly 9% from its post-listing high of ₹495. As of Monday's close, the stock ended 0.21% higher at ₹452.