Lenskart Shares Rise 1% Following CLSA's 'Outperform' Rating and Store Expansion Optimism

Lenskart Shares Rise After CLSA Initiates Coverage with 'Outperform' Rating

Shares of eyewear retailer Lenskart Solutions rose on Tuesday after brokerage CLSA initiated coverage on the stock with an 'outperform' rating and a target price of Rs 604 per share. This implies an upside potential of about 17 percent from Monday's closing price. Lenskart stock was trading at Rs 525.35, up 1.23 percent, after rising to as much as Rs 528.1 early morning.

CLSA has established Lenskart as India's leading eyewear brand with a strong presence across both urban and mass-market segments. The brokerage expects the company's ongoing store expansion strategy to drive profitability through operating leverage. Additionally, product margins are likely to support earnings growth in its domestic business. CLSA also expects profitability in international operations to improve over time.

The brokerage highlighted Lenskart's extensive retail network and brand strength as key growth drivers. However, risks to its investment thesis include affordability concerns, potential technology-led disruption, and slower-than-expected addition of new stores.

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Lenskart shares closed at Rs 515.95 on Monday, down 1.5 percent for the day. Despite this, the stock remains about 28 percent above its IPO issue price of Rs 402. The company currently commands a market capitalisation of around Rs 89,700 crore and trades at a price-to-earnings multiple of about 178 times.

The brokerage's bullish stance comes shortly after Lenskart reported a mixed set of earnings for the fiscal fourth quarter. Revenue rose 45.6 percent year-on-year to Rs 2,515.7 crore, driven by continued demand momentum and expansion across channels. EBITDA jumped 84 percent to Rs 538.4 crore, while EBITDA margin expanded to 21.4 percent from 16.9 percent a year earlier.

However, net profit declined 8.6 percent year-on-year to Rs 200 crore from Rs 218.8 crore in the corresponding quarter last year.

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Despite the moderation in profit, CLSA believes Lenskart's growth runway remains strong, supported by store expansion, improving operating efficiency, and a growing presence in overseas markets.