Lenskart jumps 10% after strong Q2 earnings
What's the story
Lenskart's shares jumped over 10% on Thursday after the eyewear retailer reported a massive 122.1% year-on-year (YoY) jump in its consolidated profit for the September quarter. The company's profit stood at ₹227.08 crore, up from ₹102.22 crore a year ago. The strong Q2 results prompted brokerages Jefferies, Morgan Stanley, and Motilal Oswal to hike their target prices for Lenskart's shares.
Target increase
Jefferies raises target price to ₹780
Jefferies has raised its target price on Lenskart to ₹780 per share, suggesting a potential upside of 16% from current levels.
The brokerage remains optimistic about the company's growth trajectory, citing strong revenue expansion and significant scope for margin improvement.
Jefferies also noted that, despite foreign exchange pressures, margin improvement remains on track with seven levers identified by Lenskart to achieve its long-term adjusted EBITDA margin target of around 25%.
Growth forecast
Morgan Stanley lifts Lenskart target to ₹805
Morgan Stanley has maintained its Overweight rating on Lenskart while raising its target price to ₹805 from ₹718.
The decision was based on the company's Q2 results, which surpassed the brokerage's estimates, and positive management commentary on growth and margins.
Morgan Stanley has also raised its earnings per share (EPS) estimates by 22% for FY27, 29% for FY28, and 35% for FY29.
Market dominance
Motilal Oswal sets ₹815 target for Lenskart
Motilal Oswal has reiterated its Buy rating on Lenskart and raised its target price to ₹815, suggesting an upside potential of 18% from current market levels.
The brokerage believes that Lenskart has built strong competitive advantages in a hard-to-scale eyewear market.
These include centralized and automated manufacturing facilities and logistics network, backward integration providing significant cost advantages, a large omnichannel presence, and technology-enabled solutions to scale operations.