Lenskart Gains on JM Financial 'Buy' Call, Sees 13% Upside

Lenskart Shares Rise on Bullish Analyst Coverage

Shares of Lenskart Solutions Ltd. gained nearly 2% in morning trade on Tuesday after JM Financial Institutional Securities initiated coverage on the eyewear retailer with a 'Buy' recommendation. The brokerage set a price target of ₹535 per share, suggesting a potential 13% upside from its current market price. The positive outlook is based on the company's strong growth prospects, technology-driven execution, and efficient vertically integrated business model.

By 12:12 PM, Lenskart's stock was trading 1.95% higher at ₹473.05. The stock reached an intraday high of ₹475, marking a 2.3% increase. This performance contrasted with the broader market, as the BSE Sensex was up by a modest 0.34% at the same time. The initiation of coverage has drawn fresh investor attention to the stock, reinforcing its position as a key player in the organised retail sector.

JM Financial's Rationale: A Multi-Faceted Growth Story

JM Financial's bullish thesis rests on several core strengths of Lenskart's operating model. The brokerage highlighted the company's extensive omni-channel network, which includes 2,270 stores across 431 cities in India and a significant international presence with 679 stores in Europe, Southeast Asia, and the Middle East as of September 2025. Despite holding only a 5% share of the domestic market, Lenskart has established itself as a category leader through its unique approach.

The report emphasizes Lenskart's decade-old technology stack as a primary competitive advantage. Technology is integrated across all operations, from customer acquisition to service delivery. Centralised eye testing, for instance, helps lower diagnosis costs and drives customer conversion and retention, with repeat rates reportedly around 98%. Furthermore, proprietary tools like Tango for tech-assisted sales and GeoIQ for data-driven store expansion enable a consistent store payback period of approximately 10 months without compromising on returns.

Vertical Integration and Superior Unit Economics

A key pillar of Lenskart's success is its vertically integrated supply chain. By centralizing manufacturing and fulfilment, the company effectively navigates the traditionally fragmented and intermediary-heavy eyewear market. This control over the value chain, combined with scale and automation, results in costs that are 35-40% lower than the industry average. These savings are passed on to consumers, enhancing affordability while maintaining strong unit economics for the company.

The typical Lenskart store, around 800 sq ft, operates with low inventory requirements due to the centralized manufacturing model. This lean operational structure supports rapid expansion and profitability at the store level, a factor that underpins the positive financial forecasts from analysts.

Strong Growth Projections and Market Opportunity

JM Financial projects a robust growth trajectory for Lenskart. The brokerage anticipates the addition of 550 new stores and forecasts a compound annual growth rate (CAGR) of 23% for revenue, 50% for EBITDA, and 55% for earnings per share (EPS) over the period of FY25-FY28. Looking further ahead, the analysis suggests Lenskart has the potential to expand its network to 9,000-9,500 stores over the next decade.

This growth is supported by strong industry tailwinds. The Indian eyewear market, valued at ₹78,800 crore in FY25, is expected to grow at a 13% CAGR through FY30. Key drivers include the rising prevalence of refractive errors, which affected 53% of the population in FY25, and increasing penetration of eyewear solutions. The ongoing shift from unorganised to organised retail is another significant factor, with the organised sector's share projected to increase from 24% in FY25 to 31% by FY30.

Valuation and Analyst Consensus

JM Financial's ₹535 target price is derived using a Discounted Cash Flow (DCF) methodology, assuming a 12% Weighted Average Cost of Capital (WACC) and 6% terminal growth. This valuation implies a 54x EV/EBITDA multiple on December 2027 earnings. The brokerage acknowledges that Lenskart trades at a premium compared to retail peers like DMart and Titan but argues it is justified by its superior growth visibility, faster earnings compounding, and category leadership.

Other brokerage firms have also weighed in on Lenskart. Jefferies previously initiated coverage with a 'Buy' rating and a ₹500 price target, citing the company's long growth runway and competitive moat. In contrast, Morgan Stanley holds an 'Equalweight' rating with a ₹445 target, viewing the stock as fairly valued at current levels while acknowledging its long-term potential to become a global leader.

Market Impact and Conclusion

The positive initiation from JM Financial provides a fresh catalyst for Lenskart's stock. The detailed analysis of its technological and operational strengths reinforces investor confidence in its business model. The company's ability to scale efficiently, both in India and internationally, while maintaining strong profitability metrics will be crucial for its long-term performance.

As Lenskart continues to capture market share from the unorganised sector and expand its global footprint, its strategic focus on technology and vertical integration is expected to sustain its growth momentum. Investors will be closely watching the company's execution on its ambitious store expansion plans and its ability to meet the high growth expectations set by analysts.