'Buy Lenskart': Jefferies projects 23% upside on eyewear maker a day before Q2 results

Brokerage firm Jefferies has initiated coverage on recently listed eyewear manufacturer Lenskart Solutions Ltd. on Friday, November 28, with a "buy" rating.

Jefferies has ascribed a price target of $500 for Lenskart, which implies a potential upside of 23% from Thursday's closing levels.

At just 5% market share, Lenskart, which is India's largest tech-driven eyewear retailer, offers a strong growth potential, Jefferies wrote in its note. It cited Lenskart's vertically integrated omni-channel model, which ensures cost efficiency, rapid delivery and superior customer experience as some of its key plus points.

While India continues to contributed to over 85% of the company's Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA), the international business expansion adds a strategic optionality for the company, the Jefferies ote stated.

India's eyewear market, which was worth $9 billion in financial year 2025, is underpenetrated and growing at a Compounded Annual Growth Rate (CAGR) of 13%. Majority of its topline comes from Prescription eyeglasses, driven by rising refractive issues, high screen time, pollution and ageing.

Jefferies anticipates Lenskart's revenue to grow at a 24% CAGR over financial year 2025-2028 led by volume growth. Its adjusted EBITDA is likely to grow at a CAGR of over 50% with margin expansion of nearly 600 basis points during the same timeframe, led by operating leverage, and improvement in international gross margins.

Earnings Per Share (EPS) may also grow at a 44% CAGR during this period, according to the brokerage, who also cited Lenskart's net cash balance sheet, rising return ratios and free cash flow as other key triggers.

At a ₹500 price target, Jefferies values Lenskart at 50 times its financial year 2028 estimated pre-Ind AS EBITDA. It says that the premium valuation should be viewed in the context of opportunity and leadership.

Rise in competition, tech-driven disruption through smart devices, or slower-than-expected growth, are some key risk factors highlighted by Jefferies in its note.

In its bull case scenario, Jefferies expects a revenue CAGR of 26%, pre-IND AS EBITDA margin to improve to 14% and a price target of ₹560, which implies a potential upside of 38% from current levels.

On the flip side, its bear case scenario projects a 16% revenue CAGR, EBITDA margin improving to 12% pre-IND AS, and a price target of ₹320, which implies a 21% downside.

A day ahead of its listing earlier this month, brokerage firm Ambit had initiated coverage on Lenskart, with a "sell" rating and a price target of ₹337.

Shares of Lenskart ended 0.7% higher on Thursday at ₹407.7. The stock mainly has sustained above its IPO price of ₹402 during its brief trading history. The company will also be declaring its September quarter results on Saturday, November 29, its first after listing.