Lenskart shares: Jefferies initiates coverage; stock rise 5% amid Netflix, Labubu deals

Overseas brokerage firm Jefferies has initiated coverage on recently listed new-age eyewear retailer Lenskart Solutions with a positive outlook and sees up to 23 per cent upside potential in the stock. Lenskart has been in news ever since its IPO for lofty valuations, while the eyewear player has been in news for new launches and products lately.

Lenskart, India’s largest tech-driven eyewear retailer, holds just 5 per cent market share, offering strong growth potential. Its vertically integrated omni-channel model ensures cost efficiency, rapid delivery, and superior customer experience. India serves as a bedrock with 85 per cent contribution to Ebitda , while the international segment offers optionality, said Jefferies.

Lenskart is India’s largest organized eyewear retailer and among Asia’s top two players, operating an omnichannel model with deep vertical integration across design, manufacturing, and retail. India’s eyewear market is underpenetrated and growing at 13 per cent CAGR, said the brokerage.

Shares of Lenskart Solutions jumped more than 5 per cent to Rs 428.50 on Friday, commanding a total market capitalization close to Rs 75,000 crore. The stock had settled at Rs 407.70 on Thursday. Lenskart will announce its September 2025 quarter results on Saturday, November 29, its first earnings post Dalal Street debut.

Prescription eyeglasses dominate, driven by rising refractive issues, high screen time, pollution, ageing, etc. Organized retail penetration is rising, with Lenskart now a firm leader, Jefferies said. "Despite this, its current share is just 5 per cent of the overall market, indicating substantial growth headroom," it noted.

According to Jefferies Lenskart controls the entire value chain with manufacturing hubs in India, Singapore, and Dubai, enabling cost efficiency and scalability. Its experience-center store format minimizes capex and accelerates payback, supporting rapid company-owned company-operated model (COCO)-led expansion.

Lenskart has a global presence in over 10 countries. "While investors often view the international foray with skepticism given the track record of Indian firms, we see a strategic rationale for Lenskart, Jefferies said. "Despite modest industry growth abroad, share gain potential exists along with cross market synergies, and profitability improvement ahead."

On Thursday, Lenskart announced its partnership with Netflix for the highly anticipated fifth and final season of the global phenomenon, Stranger Things. This collaboration sees the launch of an exclusive, limited-edition eyewear collection of eleven eyewear designs for the Gen Z and OTT communities.

"We expect revenue CAGR of 24 per cent over FY25–28E led by volume growth. Adjusted Ebitda should grow at 50 per cent CAGR with margin expansion led by operational leverage and international GM improvement. EPS to grow at 44 per cent CAGR. Balance sheet is net cash, with rising return ratios and free-cash flow," Jefferies added.

The foreign brokerage firm initiated coverage with a 'buy' with target price Rs 500, valuing it at 50 times FY28E pre-Ind AS Ebitda and said that premium valuation should be viewed in the context of opportunity and leadership. However, it has underscored rise in competition, tech driven disruption (smart devices) or slower-than-expected growth as key risks for business.

To recall, Lenskart Solutions made its Dalal Street debut on November 10, as the company raised a total of Rs 7,278.02 crore via its primary offering, selling its shares for Rs 402 apiece. The stock its up 5 per cent from its IPO price, while has surged more than 19 per cent to from its listing day lows at Rs 355.70.

However, prior to this, domestic brokerage firm Ambit initiated coverage on Lenskart Solutions even before its stock market listing as it expected a more than 16 per cent fall in the stock price of Lenskart from its issue price thanks to its capital-heavy business model, despite strong growth potential. It has a 'sell' rating on the stock with a target price of Rs 337.

On Wednesday, Lenskart announced a partnership with Labubu Popmart, the global leader in designer toy and entertainment culture. This collaboration brings together Lenskart's innovative eyewear fashion with Popmart's beloved IP, Sweet Bean, to launch a limited edition collection of Eyewear and Bitz charms in the Singapore market, said the company in its release.