Motilal Oswal Financial Services has initiated coverage on Lenskart Solutions Ltd. with a Buy rating and a target price of Rs 600, implying a potential upside of around 23 percent from current levels.
The brokerage’s bullish stance rests on one central thesis. India’s eyewear market remains significantly underpenetrated despite rising vision needs, creating a long runway for organized players like Lenskart.
Shares of Lenskart were trading at Rs 488.75 on the National Stock Exchange at 3:30 pm IST on February 20, up 1.84 percent following the coverage initiation.
A Rs 2.3 Lakh Crore Opportunity
Motilal Oswal estimates India’s total addressable eyewear market at approximately Rs 2.3 lakh crore. Nearly 53 percent of the population suffers from vision-related issues, yet penetration stands at just about 35 percent.
This gap represents structural headroom for growth.
Rising screen time, greater awareness of eye health, lifestyle changes, and a steady shift toward organized retail are expected to support sustained demand in the coming years. The fragmented nature of the market further strengthens the case for a scaled, tech-enabled operator.
Strong Positioning in a Hard-to-Scale Category
Eyewear retail is operationally complex. It requires prescription accuracy, manufacturing precision, inventory management, and trust-based customer relationships.
Motilal Oswal highlights Lenskart’s backward integration, automated manufacturing, and aggressive store rollout as key competitive advantages. The company’s manufacturing facilities enhance cost control and quality consistency, while private label offerings improve margin structure.
Store economics remain a standout metric. According to the brokerage, Lenskart outlets typically achieve a payback period of around 10 months, enabling rapid expansion without excessive capital strain.
Growth and Margin Expansion
The brokerage projects revenue growth at a 25 percent CAGR between FY25 and FY28.
Pre-Ind AS EBITDA is expected to grow at a stronger 53 percent CAGR during the same period, reflecting operating leverage and improving cost efficiencies.
Margins are forecast to expand by 625 basis points, supported by higher private label contribution, supply-chain integration, and scale benefits.
This dual growth trajectory. Revenue expansion combined with margin improvement. Strengthens earnings visibility over the medium term.
Store Expansion to Boost Market Share
Motilal Oswal expects Lenskart to add more than 1,480 stores by FY28.
If executed as projected, market share could rise from around 5 percent currently to approximately 8.3 percent by FY30. Physical expansion remains central to its omnichannel strategy, reinforcing brand visibility while driving online traffic and repeat purchases.
Near-Term Capex, Long-Term Gain
The brokerage flagged capital expenditure related to Lenskart’s Hyderabad facility as a near-term pressure point for free cash flows.
However, it views this as a strategic investment rather than a risk. The facility is expected to enhance supply-chain efficiency and reduce dependency, improving structural profitability over time.
Valuation Justified by Scale
While Lenskart trades at a premium compared with other retail peers, Motilal Oswal argues that the valuation reflects scale, growth visibility, and execution track record.
The stock is currently valued at around 0.8x FY28E EV/EBITDA. Given the long-term growth runway and improving margins, the brokerage considers this reasonable.
In a market where discretionary retail often faces volatility, Lenskart’s positioning within a healthcare-linked category provides resilience. With structural demand tailwinds and disciplined expansion, the brokerage sees meaningful upside ahead.
