Motilal Oswal sees 15% upside in Lenskart, targets Rs705
The brokerage cites Lenskart’s strong 1QFY27 performance, premiumisation, supply-chain integration and omnichannel expansion. It projects FY26-28 revenue CAGR of 25% and pre-Ind AS EBITDA CAGR of 41%, with India EBITDA margin reaching 18.5% by FY29.
What happened
Motilal Oswal recommends Lenskart, citing strong 1QFY27 performance, premiumisation, manufacturing and supply-chain integration, and omnichannel expansion
Key facts
- Lenskart CMP: Rs 612
- Lenskart target price: Rs 705
- Lenskart implied upside: 15%
- Lenskart 1QFY27 EBITDA growth exceeded revenue growth
- Lenskart projected FY26-28 revenue CAGR: 25%
- Lenskart projected FY26-28 pre-Ind AS EBITDA CAGR: 41%
- Lenskart projected FY26-28 adjusted PAT CAGR: 50%
- Lenskart India pre-Ind AS EBITDA margin forecast for FY29: 18.5%
- Lenskart international pre-Ind AS EBITDA margin forecast for FY29: 12.5%
- Poonawalla Fincorp CMP: Rs 497
- Poonawalla Fincorp target price: Rs 570
- Poonawalla Fincorp implied upside: 15%
Why this matters
Lenskart’s growth thesis highlights the strategic value of capabilities in premium eyewear, supply-chain integration and omnichannel expansion for potential partners or acquisition targets.
What to watch
- Quarterly revenue growth sustaining or exceeding approximately 25% with improving EBITDA margins.
- India EBITDA-margin expansion of at least 100-150 basis points year over year.
- Premium-category mix and average order value rising without a corresponding increase in discounting.
- Store additions meeting plan while mature-store productivity remains resilient.
- Improved inventory turns, lower fulfilment cost per order and higher in-house production utilization.
- Any slowdown in discretionary consumption, elevated competitive promotions or increase in customer-acquisition costs.
- Brokerage earnings upgrades, stronger guidance or evidence that international operations are narrowing losses.
- Track comparable-store sales, new-store openings and online-to-store conversion to assess whether omnichannel expansion is incremental rather than cannibalistic.
- Watch premium-frame and lens mix, average selling price and gross-margin progression for evidence that premiumisation is translating into profit rather than only revenue growth.
- Monitor India pre-Ind AS EBITDA margin against the path required to reach 18.5% by FY29.
- Assess inventory turns, fulfilment costs and manufacturing utilization for proof that supply-chain integration is creating operating leverage.
- Compare management guidance and consensus revisions after each quarterly result; upward FY27-FY28 EBITDA revisions would be the clearest catalyst for a rerating.