Buy Lenskart Solutions; target of Rs 600: Motilal Oswal

buy

Motilal Oswal's research report on Lenskart Solutions

Lenskart is India’s largest vertically integrated, technology-led, omnichannel eyewear platform, addressing a structurally underpenetrated eyewear category in India (53% of population impacted, modest ~35% penetration). Lenskart has built strong moats in a difficult-to-scale category through – i) a centralized, highly automated manufacturing facility and logistics network; ii) strong backward integration through in-house frame and lens manufacturing, which provides significant cost advantage; iii) large omnichannel presence through its mobile app and a network of ~2,439 retail stores across 435+ cities in India and ~705 international stores; iv) leveraging technology to ease constraints in scaling up eye tests, store expansions and delivering superior store economics (33% store-level pre-IND AS EBITDA, 10 months payback); and v) house-of-brands architecture spanning mass to premium eyewear, to achieve its goal of making quality eyewear accessible and affordable.

Outlook

We initiate coverage on Lenskart with a BUY rating and a TP of INR600, premised on DCF-implied 55x FY28E pre-INDAS EBITDA. Our valuations for Lenskart are at a premium to other leading retailers, but we believe the multiples are justifiable, given Lenskart’s superior growth profile, limited organized competition and long growth runway.

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Lenskart Solutions - 2302026 - moti