Lenskart’s Meller sunglasses are Ray-Ban of the future, says Jefferies. Here’s why Wall Street giant is bullish

In its shareholders' letter, Lenskart's founders said Meller, which was a $35 million brand and is now on track to become a $70 million. The brand is also gaining a strong global following, with its boutique stores in Amsterdam, Barcelona and Paris establishing a presence in fashion-focused markets. Meller's Paris store reportedly sees long queues on most days of the week.

Also read:Lenskart Solutions shares jump 7% after Q1 results; Jefferies, Goldman Sachs, 3 others raise target price

Jefferies, with a target price of Rs 680 (16% upside), suggests that international revenue grew 38% (constant currency growth of 29%), driven entirely by volumes, while the average selling price declined due to a higher mix of sunglasses.

Gross margin improved further to over 77%, while the adjusted EBITDA margin expanded by more than 6 percentage points to 10.6%, with the international business now contributing 35% of consolidated adjusted EBITDA. “Sunglasses volumes grew at an even faster pace, partly supported by seasonality and Meller's rapidly growing online sales,” the brokerage said in a note.

Strong network:Lenskart added 132 net stores during the quarter, including 116 in India, taking its domestic store count to 2,725, while its international network stood at 734 stores. The company sees scope to expand to more than 10,000 stores in India. Tier 2 cities continued to perform well, with monthly sales of around Rs 17 lakh per store only slightly below the average. Lenskart conducted 7 million eye tests in Q1, up around 40% YoY, with a meaningful contribution from first-time users. AI-enabled self-eye tests have also been introduced at pilot stores and could drive incremental tests and support customer acquisition.

Ray-Ban Meta’s new rival:Lenskart's smart glasses have received an encouraging response, with more than 80,000 sign-ups so far, Jefferies says. Shipments have started, while availability at stores is expected soon. The company also plans to expand the range with more styles. Early traction has been encouraging, with the brand resonating with both premium and value-conscious customers.

Mass plus premium:Lenskart is targeting both ends of the price spectrum, where it sees significant headroom for growth. Its Rs 500 proposition has managed to crack the cost equation, while at the premium end, Rs 30,000 progressive lenses generate around Rs 250 crore in annual sales.

Upbeat management commentary:Management remains confident about demand and sees supply-side constraints as the key limitation. AI-led eye tests, remote optometry and RFID are expected to support faster scaling, while the establishment of international profitability is allowing the company to shift its focus towards store additions. Talent, logistics and remote optometry will remain important for expanding into lower-tier cities. Lenskart also expects healthy same-store sales growth (SSSG) to continue despite rising store density.

Lenskart Q1 results

The company reported a 182.3% year-on-year (YoY) jump in net profit (PAT) to Rs 228 crore in the first quarter of FY27.The company’s revenue from operations rose 33.6% YoY to Rs 2,214 crore during the quarter, while earnings before interest, taxes, depreciation and amortisation (EBITDA) increased 61.3% YoY to Rs 589 crore. The eyecare services provider said growth was broad-based, with revenue from India rising 30.7% YoY and international revenue increasing 38%.

Also read:Lenskart, Delhivery, among 10 stocks with highest increase in DII holdings in Q1. See full list

Consolidated product margin crossed the 70% mark for the first time, reaching 70.3% in Q1 FY27 compared with 68.7% a year earlier. EBITDA margin also improved to 21.7% from 18.0%, with margins at 21.4% in India and 21.9% in international operations.

On Thursday, Lenskart shares rallied as much as 7% to their day’s high of Rs 627 on the BSE.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times.)

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