Lenskart IPO

It is the only fully integrated retailer globally with a centralized supply chain. This model allows it to achieve an average cost for frames and lenses in India that is 35-40% lower than the industry average for similar quality products.

It is India’s largest organized retailer of prescription eyeglasses by sales volume. Its physical presence totals 2,806 stores globally, giving it a store footprint in India that is approximately 2.5 times larger than its next largest organized rival.

Revenue grew at a 32.5% CAGR from FY23 to FY25. Operating profitability significantly improved, with EBITDA margin (excluding other income or exceptional item) expanding from 6.86% in FY23 to 17.77% in the three months ended June 30, 2025.

New stores demonstrate excellent returns, achieving an average payback period of only 10.29 months across metropolitan and Tier 1/2+ cities as of March 31, 2025. Indian stores also achieved the highest average annual sales of ₹23,492.5 per square foot among organized rivals in FY25.

It utilizes proprietary AI tools like computer vision for store optimization and geo-analytics for new store placement. Customers engaged in 3.86 crore virtual try-ons in FY25, driving efficient digital customer engagement and conversion.

Its loyalty program, Lenskart Gold, boasted 71.2 lakh members in India as of June 30, 2025. New customers acquired in FY23 showed an average purchase frequency of 3.62 eyeglasses within two years, significantly higher than the Indian average of 1.8.

It has substantially reduced its total debt from ₹917.21 crore (March 31, 2023) to ₹335.48 crore (June 30, 2025). This improved its financial stability, reflected by its interest coverage ratio rising from 5.11 times (FY23) to 8.44 times (Q1 FY26).

It efficiently manages its operational cash cycle, as Net Working Capital Days dramatically reduced to 24.08 days in the three months ended June 30, 2025. This shows significant improvement from 34.52 days in FY24.

The cost of raw materials is high, accounting for 25.45% [₹467.34 crore] of total expenses in the three months ended June 30, 2025. Reliance on materials imported from China (53.38% in Q1 FY26) exposes it to price volatility and geopolitical supply chain disruption risks.

The company’s reliance on its Gurugram industrial cluster facilities (Bhiwadi and Gurugram) creates a concentration risk. As of Q1 FY26, these two sites handled 98.42% of its total owned manufacturing production. Any localized natural disaster or regulatory change could severely interrupt order fulfillment, impacting the highly specialized lens customization process.

Retail operations rely on leased premises, resulting in total lease liabilities of ₹2,399.81 crore as of June 30, 2025. Failure to renew key store leases on favorable terms or unexpected rental spikes could disrupt its operations and affect its financial condition.

The company reported losses in recent financial periods, including ₹63.76 crore in FY23 and ₹10.15 crore in FY24. There is a risk that it may not achieve consistent, positive financial results or cash flows in the future.

Operating in 14 countries subjects it to management, political, and foreign exchange risks. Fluctuations in the Indian Rupee exchange rate could negatively impact operating margins and the valuation of reported overseas assets/liabilities. For context, in Q1 FY26, nearly 39% of its revenue came from the international market.

Total prescription eyeglasses manufacturing capacity utilization across all facilities stood at only 55.10% in the three months ended June 30, 2025. The Gurugram facility was particularly low at 39.22%, signaling potential asset underutilization risk.