NewsStocksAvendus Spark Initiates Lenskart Coverage With ₹490 Target Price, Sees Limited UpsideAvendus Spark Initiates Lenskart Coverage With ₹490 Target Price, Sees Limited Upside
Avendus Spark has initiated coverage on Lenskart Solutions with an 'Add' rating and ₹490 target price, though this implies only 10% upside from current levels. The stock has performed well since its IPO, gaining 12% from the issue price of ₹402, but has pulled back 10% from post-listing highs. The company reported strong first-quarter results with 21% revenue growth and significant margin expansion, while the brokerage expects 21% revenue CAGR over FY25-28 driven by its M2C model and international expansion plans.
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Lenskart Solutions has received positive analyst attention as Avendus Spark initiated coverage with an 'Add' rating and a target price of ₹490.00. However, the brokerage's target implies only 10% upside potential from current levels, suggesting limited near-term price appreciation despite the positive recommendation.
Stock Performance and Market Position
Shares of Lenskart have gained 12% from their issue price of ₹402.00 per share but have corrected nearly 10% from their post-listing high of ₹495.00. The stock ended Wednesday's trading session 3.60% lower at ₹448.95, reflecting recent volatility following the initial public offering enthusiasm.
Analyst Coverage Overview
According to current analyst coverage, sentiment remains largely positive for the stock. The coverage breakdown shows strong institutional support:
| Rating Type: | Number of Analysts |
|---|---|
| Buy: | 3 |
| Hold: | 1 |
| Sell: | 1 |
Five analysts now provide coverage on Lenskart, with the majority maintaining optimistic outlooks despite varied price targets.
Business Model and Strategic Advantages
Avendus Spark emphasized that Lenskart's manufacturer-to-consumer (M2C) business model addresses multiple industry challenges simultaneously. The approach tackles traditional category constraints including awareness, affordability, and accessibility while solving business limitations around assortment, quality, scalability, and supply chain agility.
The company is leveraging proprietary technology to enhance operational agility, network expansion, and customer conversion rates. Lenskart operates an omni-channel network of over 2,200 stores and provides free in-store and remote eye testing services, with rapid fulfillment capabilities offering next-day delivery across 59 cities.
Financial Performance and Growth Projections
In its first quarterly performance post-listing, Lenskart demonstrated strong operational metrics:
| Financial Metric: | Performance |
|---|---|
| Revenue Growth: | 21% |
| EBITDA Margin Expansion: | 300+ basis points |
| Current EBITDA Margin: | 19.80% |
| Previous Year Margin: | 16.50% |
Avendus expects Lenskart's consolidated revenue to grow at a compound annual growth rate of 21% over FY25-28, with EBITDA margin expansion of 550 basis points during the same timeframe.
International Expansion Strategy
The brokerage noted that Lenskart is replicating its India playbook to scale globally, expanding into international markets including Japan, Singapore, Thailand, and the UAE. This geographic diversification strategy aims to capitalize on aging populations, premiumization trends, and insurance-backed prescription demand in these markets.
Historical Stock Returns for Lenskart Solutions
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| +2.48% | +4.56% | +12.41% | +13.74% | +13.74% | +13.74% |
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