Shares of Peyush Bansal-led Lenskart Solutions will be in focus on Wednesday after Wall Street major Morgan Stanley raised its target price to Rs 718 from Rs 666, while maintaining its Overweight rating on the stock.
The new target price implies an upside of over 6% from current market levels. The hike comes as Lenskart shares have risen 35% in the last six months and over 5% since the beginning of the year.
The brokerage raised its FY27-FY30 revenue estimates by 0-2% and earnings estimates by 3-7%. India business EBITDA margin assumptions have been raised by 20-40 bps. International revenue estimates have been increased by 1-5% for FY27-FY30, with international revenue growth expected to be 24% in FY27 and 19% in FY28-FY30. International EBITDA margin assumptions have also been raised by 20-40 bps over the four-year period.
Morgan Stanley has rolled its model forward by two months to October 2027. Its bull-case valuation stands at Rs 1,154 (41% upside), up from Rs 1,048 earlier, while the base case has risen to Rs 641 from Rs 600. The bear case has been raised to Rs 304 from Rs 290.
Lenskart Q1 results
Lenskart Solutions reported a 182.3% year-on-year (YoY) increase in net profit to Rs 228 crore in the first quarter of FY27. Revenue from operations grew 33.6% YoY to Rs 2,214 crore, while earnings before interest, taxes, depreciation and amortisation (EBITDA) rose 61.3% YoY to Rs 589 crore. The eyecare services provider said growth was broad-based, with revenue from India increasing 30.7% YoY and international revenue rising 38%.
Consolidated product margin crossed 70% for the first time, reaching 70.3% in Q1 FY27, compared with 68.7% a year earlier. EBITDA margin also improved to 21.7% from 18.0%. India operations recorded an EBITDA margin of 21.4%, while the margin for international operations stood at 21.9%.
In its shareholders' letter, the company said it had reached its highest-ever number of customers in "Real Bharat" with Rs 500 glasses, including lenses and warranty, sold profitably through Hustlr Club. At the other end of the spectrum, glasses with high-end Rodenstock and Tokai lenses, including progressive lenses priced at Rs 30,000, generated around Rs 250 crore in annual sales.
Lenskart said glasses with premium Owndays lenses generated more than Rs 1,500 crore in annual sales, despite the business not having existed in India two years ago. The company said its international business grew 38%, with an EBITDA margin before Ind AS 116 crossing 10%. It believes the question is no longer whether the international business can work, but how far it can scale.
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