Lenskart growth and margin expansion strengthen as India and international stores scale

Investment View and Key Earnings Drivers

Motilal Oswal Financial Services, in its August 12, 2026 Q1 FY27 results update on Lenskart, reiterates its Buy recommendation and raises its target price to Rs 705. The broker views sustained revenue growth, product-margin expansion and operating leverage as the principal earnings drivers.

Lenskart's competitive strengths, according to Motilal Oswal, include its centralised and highly automated manufacturing and logistics network, backward integration, large omnichannel presence, technology-enabled scaling and house-of-brands architecture across mass-to-premium eyewear.

Q1 FY27 Financial Performance

Q1 FY27 consolidated revenue rose 34% year on year and 8% quarter on quarter to Rs 2,714 crore, broadly in line with Motilal Oswal's estimate. India and international revenue grew 31% and 38% year on year, respectively. Eyewear volume increased about 26% to 10.5 million units, while implied average selling price increased about 6.5% year on year to Rs 2,577, reflecting premiumisation.

Lenskart added a net 132 stores during the quarter, comprising 116 in India and 16 internationally, taking its network to 3,459 stores, up about 23% year on year.

Consolidated gross profit increased 37% year on year to Rs 1,907 crore, with product margin expanding about 155 basis points year on year to 70.3%, 90 basis points above the broker's estimate. Pro forma reported EBITDA rose 62% year on year to Rs 589 crore and the reported EBITDA margin expanded about 375 basis points to 21.7%. Pre-Ind AS EBITDA grew 95% year on year to Rs 361 crore, broadly in line with estimates, while its margin increased about 420 basis points year on year and 45 basis points quarter on quarter to 13.3%.

Adjusted PAT increased 2.6 times year on year to Rs 222 crore, 15% above Motilal Oswal's estimate, aided by higher other income and a lower tax rate. Operating cash flow of Rs 300 crore funded Rs 230 crore of store and plant capital expenditure, while ROCE improved to 23%.

India Business: Store Density and Omnichannel Expansion

India revenue grew 31% year on year to Rs 1,531 crore, slightly below the broker's estimate, as volume rose about 23% to 8.2 million units and average selling price rose about 6%. India same-store sales growth was 18.3% and sales per store growth was 24%.

Management indicated that rising store density has not caused meaningful cannibalisation and identified more than 6,100 unserved PIN codes, plus scope for over 3,000 additional stores through densification. Management sees eye-test capacity, including remote optometry and self-eye-test pilots, faster purchase journeys, technology and integrated logistics as important enablers of deeper expansion.

International Growth and Profitability

International revenue grew 38% year on year to Rs 1,203 crore, ahead of estimates, with constant-currency growth of about 29%. International volume rose about 37% to 2.3 million units and pre-Ind AS EBITDA margin reached 10.5%, up about 610 basis points year on year.

Management cited strong underlying productivity and deployment of GeoIQ as support for future international store expansion. Singapore has validated the dual-brand Lenskart and Owndays model, while Thailand is expected to follow a similar approach.

Estimates and Valuation

Motilal Oswal has raised FY27E and FY28E product-margin assumptions by about 50 basis points, driven by the ramp-up of in-house frame manufacturing. This results in pre-Ind AS EBITDA upgrades of about 4–5% for FY27E and FY28E, and net-profit upgrades of 8.7% and 10.3%, respectively.

The broker forecasts FY29 pre-Ind AS EBITDA margins of 18.5% in India and 12.5% internationally. The Rs 705 target is based on 48 times September 2028E blended pre-Ind AS EBITDA, using 55 times for India and 34 times for international operations.

Key Monitorables and Risks

Key monitorables are execution as the network scales, including customer experience, talent, organisational agility, engineering capabilities and the ability to maintain speed and culture.

Currency headwinds remain relevant, although the broker expects manufacturing localisation, supply-chain integration and vendor scale benefits to support product margins. Management noted that NPS recovered after a temporary decline associated with policy-communication issues; RFID and digital initiatives are intended to improve store productivity and reduce customer friction.