Lenskart’s stock surged 4% following its robust Q2 performance, as Jefferies reaffirmed its Buy rating with a target price of Rs 500 per share, indicating an upside potential of 18.5% from current levels. The brokerage highlighted steady profit growth, expanding eyewear margins, and a multi-vertical growth trajectory as key drivers for optimism.
1. Strong Revenue and Profit Growth
Lenskart’s consolidated Q2FY26 profit rose to Rs 102.21 crore, up from Rs 85.46 crore in Q2FY25. Revenue climbed 20.76% YoY to Rs 2,096.14 crore from Rs 1,735.68 crore. Jefferies noted that both reported and pro forma numbers confirm a consistent medium-term demand profile, reinforcing investor confidence in the company’s growth trajectory.
2. Expanding Product Margins
Product margins improved to 69.2% from 68.1%, with accruals rising to Rs 1,485 crore (+26%). Jefferies attributed the expansion to better pricing mix, in-house manufacturing efficiencies, and a higher share of premium frames and lenses. Margin growth remains a critical lever as Lenskart invests in store expansion, technology, and supply chain enhancements.
3. Eye-Testing and Eyewear Volumes Driving Growth
Lenskart’s eye-testing volumes reached 13 million in FY25, with 9.3 million tests in H1 FY26 alone, reflecting accelerated penetration in Tier-II and Tier-III cities. Eyewear sales grew 20.2% YoY, while eye-testing revenue surged 44.3%, highlighting the brand’s service-led model as a recurring demand driver.
4. Pro Forma Financials Provide Clearer Insights
CEO Peyush Bansal emphasized that pro forma financials help evaluate business momentum by presenting acquisitions as if they were always part of Lenskart. Jefferies agreed, stating that this method offers a clearer view of underlying demand trends without accounting distortions.
5. Offline Expansion Strengthens Omni-Channel Strategy
Lenskart continues to scale its offline footprint, supported by steady store economics and rising footfalls. Quick commerce, especially in metro markets, adds another growth vector. The dual-channel approach reduces reliance on online-only sales, stabilizes margins, and lowers customer acquisition costs.
Risks to Watch
Jefferies highlighted key risk factors:
- Pace of international expansion
- Supply-chain efficiency at new manufacturing units
- Competition from horizontal marketplaces
- Continued growth in eye-testing
- Sustainability of margins
Despite these risks, Jefferies noted Lenskart’s unique combination of manufacturing depth and retail presence positions it as one of India’s leading consumer-tech companies.
Conclusion
Lenskart’s strong Q2 performance, expanding margins, and omni-channel growth strategy have investors optimistic. Jefferies’ reaffirmation of its Buy rating with 18% upside underscores the company’s steady path toward becoming India’s dominant eyewear retailer.
