Lenskart shares are set to debut on the stock exchanges on November 10, 2025. Ahead of this listing, Ambit Capital has initiated coverage on the eyewear retailer with a sell rating, citing valuation concerns despite the company’s strong revenue growth and expanding footprint both domestically and internationally.
Ambit noted a significant disconnect between Lenskart’s growth prospects and its return ratios. The firm anticipates the company will achieve nearly 20% revenue compound annual growth rate (CAGR) from FY25 to FY28, driven by ongoing expansion in India and increased scale in international markets. Additionally, margin improvements and operating leverage are expected to result in a 630 basis points expansion in Pre-Ind AS 116 EBITDAM (450 basis points on a pro forma basis).
However, the brokerage identified structural challenges in scaling a made-to-order category like eyewear. With plant utilization currently at about 65%—well below the 80% typically seen in retail categories—Lenskart will need considerable capital investment to maintain its growth trajectory. Ambit estimates capital expenditures of ₹20 billion from FY25 to FY28, which may keep free cash flow negative until FY28.
While acknowledging Lenskart’s higher growth profile compared to its retail peers, Ambit believes that the current valuation premium is difficult to justify. At the prevailing market price of ₹402, the stock appears to reflect an 18% compounded revenue growth over two decades, effectively pricing in nearly 60% of EssilorLuxottica’s current market share in retail eyewear.
At this valuation, Lenskart’s shares trade at approximately 55 times FY28E Pre-Ind AS EV/EBITDA for its India operations—representing a 15% to 30% premium over high-growth peers such as Trent and Nykaa’s beauty and personal care segment. Furthermore, the company’s return on capital employed (RoCE) stands at 9%, while return on invested capital (RoIC) is at 13%, both trailing behind peers that typically achieve returns in the 35% to 40% range despite similar growth trajectories.
Ambit has set a target price of ₹337, assigning 45 times and 22 times EV/EBITDA multiples for its India and international businesses, respectively. The brokerage also noted potential upsides, including stronger-than-expected same-store sales growth in India and improved profitability in international ventures.
Ambit’s analysis indicates that while Lenskart’s growth trajectory remains strong, its current market valuation offers limited room for error, rendering the risk-reward scenario unfavorable at current levels. Shares are scheduled to begin trading on November 10, 2025.
