Jefferies backs Lenskart with 'Buy' despite muted market debut; here's why

Jefferies initiates coverage on Lenskart: Despite a muted debut on the bourses earlier this month, foreign brokerage Jefferies has initiated coverage on Lenskart stock with a ‘Buy’ rating and a price target of ₹500 (upside of 23 per cent), arguing that the company’s business fundamentals and long-term growth potential remain firmly intact.

 

Analysts Vivek Maheshwari, Kunal Shah, Rajesh Kumar and Rushabh Bhachawat of Jefferies said in a note dated November 27, 2026 that Lenskart is ‘India’s largest tech-driven eyewear retailer,’ yet holds only about 5 per cent market share, leaving ‘strong growth potential’ in a market that remains meaningfully underpenetrated.

 

The brokerage said Lenskart’s vertically integrated omnichannel model; spanning design, manufacturing and retail; drives cost efficiency, faster delivery and a superior customer experience.

 

This, it noted, gives the company an edge over India’s fragmented eyewear retail landscape. India continues to be the core profit driver, contributing more than 85 per cent of earnings before interest, tax, depreciation and amortisation (Ebitda), while the international business provides additional strategic optionality.  ALSO READ | Emkay favours non-ferrous over steel; sees earnings upgrade in VEDL, Nalco

Large market opportunity, strong domestic moat

 

According to Jefferies, India’s eyewear market, sized at roughly $9 billion in FY25, is expanding at about 13 per cent annually. Prescription eyeglasses dominate with over 70 per cent share, supported by rising refractive issues, increasing screen exposure, pollution and an ageing population. With organised retail penetration at around 24 per cent, Lenskart has emerged as a clear leader with more than 2,100 stores. Yet, its current market share of about 5 per cent indicates significant growth headroom.

 

A major competitive moat, the brokerage highlighted, is Lenskart’s control over the entire value chain. The company’s manufacturing hubs in India, Singapore and Dubai enhance scalability and efficiency. Its experience-centre format reduces capital expenditure and speeds up breakeven, with 80 per cent of stores achieving payback within a year.

 

This enables rapid growth under the company-owned, company-operated (COCO) model, advantageous in a category Jefferies described as highly complex due to bespoke customisation, millions of combinations and multi-step manufacturing.  ALSO READ | Motilal Oswal ups Piramal Finance target, retains 'Buy' on retail-led surge

International optionality and strong financial outlook

 

On the international front, Jefferies analysts said Lenskart’s presence across more than 10 countries, through organic expansion and acquisitions including Owndays in Asia and Stellio/Meller in Europe, adds strategic value. While global eyewear markets are growing at a modest 3-7 per cent, the brokerage sees room for market share gains, cross-market synergies and improved profitability.

 

Financially, analysts expect around 24 per cent revenue compound annual growth rate (CAGR) over FY25-28 led by volume growth. Adjusted Ebitda is projected to rise more than 50 per cent annually, supported by operating leverage and better international gross margins, while earnings per share (EPS) is expected to grow at about 44 per cent CAGR. Jefferies also flagged Lenskart’s net cash balance sheet, improving returns and free cash flow.

 

Hence, the brokerage values the company at 50x FY28 estimated pre-Ind AS Ebitda and maintains a ‘Buy’ stance, while cautioning that key risks include increasing competition, tech-driven disruption such as smart devices, and slower-than-expected expansion.

  Disclaimer: Target price and stock outlook has been suggested by Jefferies. Views expressed are their own.