Lenskart’s Valuation Looks Rich Despite Strong Earnings Growth, Target Price Set at Rs 525
Lenskart has become one of India’s most talked‑about stocks in 2025. On December 30, 2025, Emkay Global set a target price of ₹525 for the company’s shares. This was based on future earnings and growth potential.
At the same time, many investors are asking a big question: Is the valuation too high even if profits are rising? Lenskart has reported strong earnings growth and a shift to profitability. It also posted a solid quarterly profit ahead of its IPO.
Yet its current valuation still seems rich compared with earnings and industry peers. This mix of strong results and expensive stock pricing makes the Lenskart story both exciting and controversial. Let’s explore why its valuation looks high and what that means for investors.
Strong Earnings Growth: What the Numbers Reveal?
Lenskart has moved from losses to real profits in a short time. In FY25, Lenskart reported a net profit of ₹297 crore after years of losses. It earned ₹6,652 crore in revenue, up sharply from the previous year. This marked its first true profit year before going public.
The company also showed consistent quarterly growth in 2025. In Q1 FY26, it posted a net profit of ₹62 crore and revenue growth of 25% over the last year. This was a strong sign that profit momentum continued after the IPO.
Beyond pure profit, Lenskart has expanded sales volume. In Q2 FY26, net profit rose around 20% to ₹104 crore, with sales climbing over 20% driven by more units sold. Revenue gains came from both India and international markets. Nearly 40% of revenue in mid‑2025 came from overseas, showing demand beyond domestic retail.
These figures show steady topline and bottom‑line improvements. Margins expanded, and the operating scale grew. Still, many investors watch how profit trends hold over time.
Lenskart’s DCF‑Based Target Price ₹525: What It Means?
Analysts at Emkay Global used a discounted cash flow (DCF) model to value Lenskart’s future earnings. Based on this method, they set a target price of ₹525 for its shares.
The target assumes the company will grow revenue up to six times over the next decade. Emkay also expects margins to improve as the business scales and more company‑owned stores open.
The valuation reflects an estimated 56× EBITDA multiple by December 2027. This is a high multiple, meaning the stock price depends heavily on future profit growth.
Emkay sees structural strengths in Lenskart’s model. These include technology uses like AI for merchandising and virtual try‑on tools that help sales. Geographic data is also used to plan store locations efficiently.
The brokerage also highlighted macro tailwinds, such as tax cuts (GST reduction) and rising eyewear demand as lifestyle fashion products.
While the ₹525 target shows confidence in long‑term growth, it also means the current stock price already reflects much of that future potential.
Why Lenskart Valuation Still Looks Rich: Analyst Warnings
Even with strong growth, many financial analysts argue that Lenskart’s valuation remains high.
One concern comes from valuation metrics after the company went public. Lenskart’s stock trades at a high price relative to its earnings and sales. According to reports from November 2025, the company’s EV/Sales stood around 10.1× and EV/EBITDA near 68.7× for FY25 results. These multiples are high compared with other retail and eyewear businesses.
Some brokers see potential downside. For example, Ambit Capital initiated a Sell rating with a target price of ₹337, much lower than Emkay’s estimate. They pointed to the company’s capex‑heavy model, modest return on capital, and pressure on free cash flow as reasons the valuation may be hard to justify at current levels.
Another issue is thin core profitability after adjusting for one‑time gains. During the IPO process, some analysts noted that part of the reported profit came from non‑operating income tied to acquisition accounting. This raises questions about true earnings strength.
These warnings highlight why many investors view the valuation as rich or expensive, especially for a company still investing heavily in expansion.
Lenskart Optional Growth Engines: Can Justify Premium?
Despite valuation concerns, some aspects of Lenskart’s strategy may justify a premium in the long run.
One key opportunity is the managed vision care ecosystem. Emkay Global believes this service, which includes eye tests and follow‑ups, can add recurring revenue. Lenskart is also moving into audiology services and broader health‑related testing fees. These adjacent businesses could open new income streams beyond eyewear.
Another area is smart eyewear and wearables. If Lenskart can successfully market tech‑enabled glasses, the company may tap into higher‑margin products that attract premium customers.
International expansion remains a growth driver, with operations in Singapore, Dubai, and other Asian markets providing global scale. These future segments could help justify a higher valuation if they materialize into real revenue and profit over time.
Investor Takeaways for Lanskart: Buy, Hold, or Cautious?
Investors face a clear choice.
Short‑term traders may find the stock expensive now. The current price already reflects much of the growth expected in the coming years. High valuation multiples imply there is limited room for short‑term gains unless profits expand faster than forecast.
Long‑term investors might still see value. Lenskart’s strong brand, market share, and tech integration give it advantages over competitors. If the company delivers on growth opportunities and international reach, today’s rich valuation could pay off over many years.
Risk‑aware investors should watch core earnings without one‑time items and track cash flow trends closely. Sustainable profits and improved returns on capital will be key markers of value creation. Careful evaluation of risk and reward helps decide whether the stock fits individual investment strategies.
Conclusion: Growth vs Valuation Reality Check
Lenskart is in an exciting phase. It has strong revenue growth, rising profits, tech advantages, and a global footprint. The ₹525 target price from Emkay Global reflects confidence in long‑term earnings potential.
Yet its valuation still looks high relative to earnings and cash flow. Analysts warn that rich multiples mean investors are paying upfront for future success, not current profits. Strong fundamentals alone may not justify valuation if growth slows or margins shrink.
Understanding both sides’ growth prospects and valuation risk is crucial for investors judging Lenskart’s stock in 2025 and beyond. The balance between optimism and caution will shape how the company’s market value evolves over time.
Frequently Asked Questions (FAQs)
Lenskart’s stock price is already very high compared with its profit and earnings ratios. Many experts say much of future growth is already priced in, so valuation seems rich.
The ₹525 price is a forecast based on future earnings growth and cash flow models. It shows what analysts expect the share could reach if goals are met.
There is no clear yes or no. Some see long‑term growth, and others think the stock is expensive. Investors should watch profit trends and risks before deciding.
Disclaimer:
The content shared by Meyka AI PTY LTD is solely for research and informational purposes. Meyka is not a financial advisory service, and the information provided should not be considered investment or trading advice.
