Jefferies keeps Buy on Lenskart, sees premium flagship format lifting unit economics
Jefferies maintained its Buy rating on Lenskart with a target price of Rs 676 per share, citing the eyewear retailer’s flagship-store format as a sharper push into premium segments. The brokerage expects better basket sizes, store productivity, product mix and profitability over time.
The brand move
Jefferies maintained a Buy rating on Lenskart with a TP of Rs 676/share, saying its flagship-store format signals a sharper premium-segment push that could improve basket sizes, productivity, mix and profitability over time.
The numbers
- Rs 676/share
Why it matters for the brand
Lenskart’s premium flagship format could lift store productivity and margins through larger baskets and a richer product mix.
What to track next
- Comparable-store sales and sales-per-square-foot trends at flagship locations.
- Average order value, premium-frame mix, progressive-lens mix, and add-on attachment rates.
- Store-level EBITDA margins, rent-to-sales ratios, and new-store payback periods.
- Evidence of cannibalization versus incremental demand in markets with existing Lenskart outlets.
- Premium consumer demand resilience, discretionary-spending trends, and competitor promotional intensity.
The counter-case
Premium flagships can raise rent, staffing, fit-out and inventory costs faster than basket sizes, especially if affluent demand is limited outside a few metros. Higher-ticket mix may cannibalize existing stores rather than add incremental demand, while online-first competitors, optical chains and luxury brands could force discounting that erodes the expected margin uplift. A Buy rating and target price also do not validate execution: store economics need to improve after mature-period occupancy, capex and working-capital costs, not merely on early sales productivity.