Why Is Motilal Oswal Bullish on Lenskart Despite Its Premium Valuation?

Synopsis: Lenskart shares gained momentum after Motilal Oswal set the Street’s highest target of Rs 600, implying 23% upside despite a rich valuation. The broking remains bullish, citing strong revenue growth, improving profitability, scalable store economics, and the company’s vertically integrated, omnichannel model driving long-term structural growth.

The shares of this company, which is a technology-focused eyewear company involved in the design, manufacturing, branding, and retail of prescription eyeglasses, sunglasses, contact lenses, and accessories, were in focus today after the company was given the highest target by MOSL with an upside of 23%.

With a market cap of Rs 84,410 crore, the shares of Lenskart Solutions Ltd are trading at Rs 486.55; the shares are trading at a PE of 222 compared to its industry PE of 28.3.

MOSL on Lenskart

Motilal Oswal Financial Services continues to be bullish on Lenskart even at a premium valuation because it views the company as a structural story and not just a typical retailer. With a target price of Rs 600 (the highest among brokerages and 12% above the consensus price of Rs 534), MOSL feels that the company’s growth story warrants a premium valuation. The broking forecasts robust revenue and EBITDA growth over the next few years, driven by the leverage effect of opening more stores.

The broker also points out that Lenskart’s vertically integrated business is a major competitive advantage. The company designs, manufactures, and distributes its products, which enables it to better manage margins than typical eyewear retailers who rely on third-party brands. With over 2,000 stores across India and other international geographies, along with a strong omnichannel business, Lenskart has created strong brand recall. The Indian eyewear market is still underpenetrated, and factors such as increased screen time, greater awareness about eye care, and rising disposable incomes offer a long growth runway.

Moreover, MOSL is also encouraged by the store economics and scalability of Lenskart. The mature stores are clocking strong EBITDA margins, and the payback periods for stores are not very long. This is improving the return ratios as the company expands. As the fixed costs get scaled over the bigger revenue base, the profitability is also expected to improve significantly. The stock has already moved up by over 12% since listing, and a move towards Rs 600 would indicate an upside of 23% from here.

Financials

The revenue from operations for the company stood at Rs 2,308 crores in Q3 FY26 compared to Q3 FY25 revenue of Rs 1,669 crores, up by about 38 per cent YoY. However, the net profit stood at Rs 133 crore in Q3 FY26, up compared to the Rs 2 crore profit in Q3 FY25.

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