Lenskart IPO is ready to launch on the D-Avenue tomorrow, Friday, October 31. Buyers will likely be eagerly observing how the preliminary public providing performs, particularly given the numerous dialogue surrounding its valuations. There are appreciable considerations about Lenskart’s valuation, notably because it goals for a post-IPO valuation of roughly ₹70,000 crore.
Lenskart IPO worth band has been set within the vary of ₹382 to ₹402 per share. In response to brokerage stories, on the higher band of ₹402, the Lenskart IPO is assessed at FY25 EV/Gross sales and EV/EBITDA ratios of 10.1x and 68.7x, respectively, contemplating the post-issue capital. The valuation for Lenskart seems to be stretched.
Lenskart was initially established as ‘Valyoo Applied sciences Non-public Restricted’ by Peyush Bansal, Neha Bansal, Amit Chaudhary, and Sumeet Kapahi. The corporate started its operations in India as an internet enterprise in 2010 and launched its first bodily retailer in New Delhi in 2013.
Contemplating its historical past and presence available in the market, Mohit Gulati, CIO, ITI Progress Alternatives Fund stated that the startup world usually lives in a little bit of delulu—non-public markets thrive on ‘price-to-dreams’ multiples moderately than price-to-earnings. However the public markets aren’t shopping for desires; they worth self-discipline. Gulati believes Lenskart will seemingly uncover that actuality quickly after itemizing.
“To be clear, I genuinely admire what the corporate has constructed—it’s a class chief with nice execution—however admiration should meet arithmetic. On the proper valuation, there ought to nonetheless be one thing left on the desk for public traders,” stated Gulati.
Peer comparability
As outlined in Lenskart’s crimson herring prospectus (RHP), the corporate primarily competes with key organized retailers of prescription eyewear in India, reminiscent of Eyegear Optics India Non-public Ltd, Gangar Opticians Non-public Ltd, GKB Opticals Ltd, Lawrence and Mayo (India) Non-public Ltd, Specsmakers Opticians Non-public Ltd, and Titan Firm Ltd (Eyecare division).
Most different outstanding organised optical retailers will not be talked about, excluding Titan Firm Ltd, which encompasses the Titan Eyecare division.
Some brokerages have famous of their report that they examine this problem with main international retailers within the prescription eyewear market, reminiscent of Essilor Luxottica SA, Fielmann AG, Warby Parker Inc., and Nationwide Imaginative and prescient Holdings, Inc. SBI Securities talked about that the enterprise fashions of worldwide friends would possibly differ from that of Lenskart Options Ltd, making it a problem to make a direct comparability.
Nonetheless, the info signifies that Lenskart seems costlier as compared.
Profitability
Lenskart introduced a rise in earnings because it approached its IPO, reaching internet profitability in FY25 following years of losses attributed to important investments. In FY25, Lenskart posted a revenue after tax (PAT) of ₹295.6 crore, whereas in Q1FY26, it achieved a PAT of ₹60.1 crore.
Prashanth Tapse, Analysis Analyst, Senior Vice President of Analysis at Mehta Equities, defined that Lenskart is reportedly in search of a valuation of round ₹70,000 crore from its upcoming IPO a degree that seems priced for future earnings, which stay unsure given its present monetary profile. Regardless of robust income development, the corporate’s revenue margins are nonetheless skinny, constrained by excessive advertising and buyer acquisition prices, in addition to ongoing investments in offline growth and logistics infrastructure.
Speaking concerning the topline, Arun Kejriwal, the founding father of Kejriwal Analysis and Funding Providers defined that the corporate’s income stands at roughly 6,500 crores, and on the higher finish of its worth band, it might be valued at round 70,000 crores, translating to a income a number of near 10.5 or thereabouts.
Lenskart’s valuation shouldn’t be low-cost by any means; it’s, the truth is, on the upper aspect. One can consider this primarily based on a number of metrics, together with the price-to-earnings (PE) ratio derived from earnings per share (EPS) and the income in comparison with market capitalisation.
Lenskart outlook: Wait and watch submit checklist earnings efficiency
Prashanth Tapse, Analysis Analyst, Senior Vice President of Analysis at Mehta Equities, stated that basically, new traders could be paying upfront for the price of future development moderately than present profitability. Whereas bankers and promoters are positioning Lenskart as a tech-driven client platform moderately than a conventional retailer like Titan, the valuation premium appears steep when considered via typical metrics.
The costly premium might be justified provided that Lenskart manages to maintain a 30–40% income CAGR over the following 3–4 years, expands efficiently into worldwide markets, and regularly improves EBITDA margins from present low single digits to the higher-teens vary.
“Till then, the ₹70,000 crore valuation appears to be like stretched relative to fundamentals. I would like to attend and watch post-listing efficiency and consider quarterly earnings visibility earlier than investing choice. Nonetheless, risk-tolerant traders should think about betting on Lenskart’s new-age, tech-enabled enterprise mannequin and its long-term potential,” stated Tapse.
Disclaimer: The views and suggestions given on this article are these of particular person analysts. These don’t symbolize the views of Mint. We advise traders to verify with licensed specialists earlier than taking any funding selections.
