Lenskart Solutions shares jumped as much as 7% to Rs 627 on Thursday after the eyewear company’s first-quarter results showed a sharp improvement in profit, revenue and margins. The strong Q1 performance has also prompted several brokerages to raise their target prices for the stock.
For investors wondering whether Lenskart shares are still worth buying after the recent rise, the brokerage view remains largely positive.
Jefferies, Morgan Stanley, Goldman Sachs, Macquarie and Motilal Oswal are bullish on the stock, while Citi has a Neutral rating and believes much of the expected growth is already reflected in the valuation.
Lenskart reported a 182.3% year-on-year jump in net profit to Rs 228 crore in Q1 FY27.
Revenue from operations rose 33.6% year-on-year to Rs 2,214 crore, while EBITDA increased 61.3% to Rs 589 crore.
The improvement was not limited to its India business. Revenue from India increased 30.7%, while international revenue grew 38%.
Margins also improved significantly. Lenskart’s consolidated product margin crossed 70% for the first time, reaching 70.3% compared with 68.7% a year earlier. EBITDA margin increased to 21.7% from 18%.
This combination of strong revenue growth and improving margins is one of the main reasons brokerages have turned more positive on the stock.
Jefferies has maintained a Buy rating and raised its target price to Rs 680 from Rs 600. Based on the stock’s Rs 627 price mentioned in the report, that implies around 8.5% upside.
The brokerage said Lenskart’s growth and margin expansion story has strengthened after the Q1 performance. It also highlighted around 70,000 daily eye tests, suggesting that supply rather than demand is emerging as a constraint in India.
Jefferies also pointed to Lenskart’s Rs 500 entry-level product and the premiumisation opportunity. It expects improving margins in the international business to address one of the key concerns around the company.
Morgan Stanley has an Overweight rating with a target price of Rs 666, implying around 6% upside from Rs 627. It said the latest quarter was another strong performance, with the international business being a major contributor to the beat.
Goldman Sachs has an Accumulate rating and raised its target price to Rs 715 from Rs 625. Its target implies around 14% upside from Rs 627.
Goldman said Lenskart’s growth and margin expansion continue to support the investment case. It also identified premiumisation as a new growth driver, while India’s business continues to benefit from volume growth and operating leverage.
Macquarie has an Outperform rating and raised its target price to Rs 675 from Rs 625, implying around 8% upside.
The brokerage highlighted strong volume growth, premiumisation across lenses and frames, the Rs 500 entry-level offering and the potential for more than 10,000 stores in India.
Motilal Oswal has retained its Buy rating and raised the target price to Rs 705 from Rs 655. That represents around 12.4% potential upside from Rs 627.
The brokerage expects scale, backward integration and margin expansion to continue supporting earnings. It also expects in-house frame manufacturing to provide further support to margins and earnings.
Citi, however, has taken a more cautious view. It has maintained a Neutral rating while raising its target price to Rs 650 from Rs 600. Its target implies only around 3.7% upside from Rs 627.
Citi said Lenskart’s execution remains strong, supported by store expansion, customer acquisition and higher conversion. However, it believes the current valuation already factors in the expected growth and margin improvement, limiting the potential upside.
The brokerage picture is clearly tilted towards the positive side, but there is an important distinction.
Five brokerages covered in the report are positive on the stock, with Buy, Overweight, Accumulate or Outperform ratings. Their target prices range from Rs 666 to Rs 715.
Citi is the only brokerage in the report with a Neutral rating, with a Rs 650 target.
Taken together, the targets suggest that brokerages still see some upside after the Q1-driven rally, but the potential returns are not uniform. The most bullish target in the report is Rs 715, while the lowest is Rs 650.
The key reason for the positive view is that Lenskart is showing both growth and margin expansion. Revenue is growing at a strong pace, while higher product margins and improving international profitability are helping earnings grow even faster.
The question for investors, however, is whether Lenskart can maintain this momentum as it expands further.
The first factor is international growth. The international business delivered a strong performance in Q1 and also recorded margin improvement. Sustaining this momentum could remain important for the stock’s earnings growth.
The second is premiumisation. Brokerages see customers moving towards higher-priced lenses and frames as a potential growth driver.
The third is store expansion. Macquarie sees potential for Lenskart to eventually have more than 10,000 stores in India, making the pace and economics of expansion important to watch.
The fourth is margins. Product margin has crossed 70%, while EBITDA margin has risen to 21.7%. Investors will want to see whether these improvements can continue.
Finally, valuation remains a key consideration. While most brokerages remain positive, Citi’s Neutral call is a reminder that a strong business does not automatically mean the stock is cheap.
The overall message from the brokerages is that Lenskart’s Q1 results have strengthened the growth and margin story, but investors also need to consider how much of that optimism is already reflected in the stock price.
For investors evaluating Lenskart shares, the key things to track going ahead will be revenue growth, international performance, margins, premiumisation and store expansion.
(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)