Lenskart IPO Investment Analysis

Lenskart.com is set to open its IPO tomorrow, aiming for a ₹70,000 crore (approx. $8 billion) valuation with an issue size of ₹7,278 crore at a price band of ₹382–₹402 per share. While the company has shown impressive growth and posted its first significant profit this year, the stretched valuation and one-off accounting gains make its fundamentals debatable. Financial Performance - Lenskart posted revenues of ₹6,652 crore in FY25, up about 22.5% from FY24, with net profit at ₹297 crore (after a ₹10 crore loss last year). - Much of its profit boost is attributed to a one-time accounting gain (FVTPL) from the Owndays acquisition; adjusted profit sits at nearly ₹130 crore, resulting in a net margin of 1.9%. - In Q1 FY26, revenue rose 24.6% YoY to ₹1,894 crore, and net profit stood at ₹61 crore. - The company operates more than 2,700 stores globally, with a dominant presence in India and growth in Southeast Asia and the Middle East. Valuation - The IPO implies a P/E (price-to-earnings) ratio of up to 230x at the upper price band, which is high even by consumer tech standards in India. - Analysts flag the stretched valuation: despite revenue growth and strong gross margins (~70%), sustained profitability is recent and partly artificial due to accounting treatment. - Lenskart is priced distinctly higher than competitors and even recent tech IPOs, factoring in both its omnichannel strategy and international growth but also exposing investors to execution risk and the volatility of one-time profits. - Major institutional investors are participating, but many market experts caution that the listing gains could be limited if growth does not translate into sustained real profit. Opinion - The topline and store expansion story is robust, but the valuation is fueled more by investor FOMO and momentum than by consistent bottom-line fundamentals. - The logical basis for the high valuation is debatable: while Lenskart is a branding and distribution leader, investor expectations appear to be pricing in future profit growth that the current numbers—especially adjusted profits—do not fully justify yet. - If Lenskart maintains operational efficiency and leverages its scale internationally, valuation multiples could eventually normalize. However, the short-term risk is that current profitability is not organic, and the P/E ratio leaves little margin for error. Lenskart’s IPO valuation looks ahead of its real earnings—and hinges on faster future profit growth and successful global execution. If accounting profits normalize and high growth is sustained, it can justify its multiples; otherwise, risks are oversized for new public investors.

In the last few days, my analysis on Lenskart’s upcoming IPO is has gotten over 5,00,000 views and tons of comments. What's interesting is that in that analysis, I had only shared a pure numbers’ driven perspective. No speculation. After comparing the company with its global and local peers on scale, growth, and profitability, I had arrived at the conclusion that the company’s $10B valuation is - for the lack of a better word - a LOOT. The math was simple, and it was saying that the company, by any measure, can not be valued beyond $3.5- $5B at this stage. Period. Now my analysis was read by lakhs of people from all walks of life, including many heavyweight finance professionals from all over the world. What's cool is that NONE of them refuted on the logic, math, and conclusion of the piece. Absolutely none. What does it say about Team Lenskart and the people behind this IPO? It’s impossible that EVERYONE with a brain can see something, and they can not. Which means that they know what they’re selling and doing it anyway. But why? Think about it. They're going for a valuation of $10B (now $8-9B) at a profit of ₹297 Cr, with a growth rate slowed down to 21.5%; asking for a revenue multiple of 13x, and a P/E of about 280x, when Titan - despite being a giant with ~10x revenues and net profits, and a growth rate of 26.5% - is trading at a revenue multiple and P/E of 4.8x and 80x, respectively. Why? Why would they not play it okay and value themselves at $5B, and take retail investors along for the next 4-7 years till they “grow into” their aspirational valuation of $10B? After all, the company has raised $1.8B in all. Even a $5B market cap will mean a solid return. Didn’t they see what happened to Paytm? Don’t they know that the market is pretty fragile right now, and all it takes is just one bad flick for the sentiment to turn very negative for a very a long time? And when (not if) that happens, everyone holding their stock would instantly lose half of their money. That's a fact. Don't they see it coming? And if they do, how are these people any different from the Wall Street folks who knowingly sold bad securities just before they were going to zero in back in 2008? This is a travesty. The is so open and shut that it’s sad. People often say why SEBI doesn’t stop this kind of activity, and while the question is fair, it's not SEBI's job to play the referee on individual companies’ valuations. If they interfere, it’ll be regulatory overreach. Then there are people who say it’s the job of Average Aakash to not invest in such companies. While that's fair as well, it doesn’t matter because most of the money that goes into these IPOs is led by institutions who manage people’s money indirectly. This is why there’s no substitute for personal accountability. It's on Team Lenskart to play fair. They should look at $5B, and everyone will be safe. I wish them luck. P.S. We’re helping people find jobs and recruiters find people. Talk to Kavisha.ai

Lots of hue and cry around valuation of Lenskart. But the people who would have arrived at this valuation would have done so basis assumptions around - Future sustained growth ( which i think in this case is assumed very high) - Operating Margins Improvement ( which again i think is assumed very high) Till the time company delivers on both these fronts ( Like Zomato or Ixigo), prices keep moving up/don’t fall And if either don’t live up to expectation, valuation crashes ( multiple examples) So instead of outrage on social media around only high P/E, if you are looking to invest, revisit these 2 assumptions yourself by looking at the business and financials and see if it makes sense Personally not a big fan of listing with extremely high valuations as any small misses around growth/margins are punished very badly. Public markets are ruthless and the same mutual funds in the anchor book today will be the first ones to sell if the numbers miss

Lenskart IPO When investors and media rush to celebrate an IPO, it’s worth asking : Who is really celebrating- the company or its early investors/ backers? The headlines are talking about profitability turnaround, revenue potential, comparison with Titan Eye and its valuation. When you take a closer look at the offer structure, you get a more nuanced story. The IPO comprises a fresh issue of around INR 21,500 million (or INR 2150 crore)- this is the money that will go directly to the company and an Offer for Sale (OFS) of about 12.76 crore shares, valued at over INR 5,000 crore at the upper price band(INR 382-402). This means nearly 3/4th of the IPO proceeds will go to existing shareholders cashing out, not to Lenskart’s balance sheet. In essence, this IPO is as much about providing liquidity to early investors as it is about funding the company’s next phase of growth. As I shared before in Healthcare Business International covering the Lenskart IPO for European PEs and investors- the private equity and VC funds that entered India pre-2020 are hitting the liquidity windows. Public markets are offering better price discovery and partial exit flexibility than pure M&A. There is nothing inherently wrong with this. These exits are a natural part of the startup lifecycle. But it does shift the lens for potential investors. The key question is not how big the IPO is, but how effectively Lenskart can deploy the INR 2,150 crore it actually raises to sustain growth and justify its near-INR 8 billion valuation.

Lenskart’s hype has clearly outpaced its fundamentals. The company’s so-called profitability came from a one-time transaction, not sustainable business growth. Much of its income still comes from non-operating sources, raising questions about the strength of its core retail engine. At a PE of 228x and Price-to-Sales of 10.5x, the valuation seems driven more by narrative than numbers. Eyewear retail is a low-margin, capital-heavy business. The comparables are highly valued too, but Are these new age companies into bubble? If Lenskart pitched on Shark Tank today, even Peyush Bansal might ask the same hard questions he asks others. Where is the real value behind the valuation?