Lenskart valuations cap near-term upside; Citi initiates with ₹500 target

Shares of newly listed Lenskart Solutions Ltd. will be in focus on Tuesday, February 10, after brokerage firm Citi initiated coverage on the stock.

Citi began coverage with a 'Neutral' rating and a price target of ₹500, implying a potential upside of nearly 8% from current levels.

The brokerage said Lenskart is driving a paradigm shift in India's eyewear industry by improving accessibility and affordability, while also benefiting from a shift towards eyewear as a lifestyle purchase with higher replacement frequency.

Citi added that the company's integrated manufacturing capabilities and technology-driven supply chain, combined with its D2C-led model, create a strong competitive moat.

However, while Lenskart offers robust growth visibility and improving unit economics, Citi believes current valuations already factor in much of its medium-term growth and margin potential, limiting near-term rerating catalysts.

Key risks, as per the brokerage, include dependence on global supply chains, potential acquisitions, deterioration in store-level economics, and rising competitive pressures.

At present, seven analysts track the stock, with five recommending a 'Buy', while one analyst each has a 'Hold' and 'Sell' rating.

Shares of Lenskart Solutions are up 16% from their issue price of ₹402, though the stock has corrected 6% from its post-listing high of ₹495. The stock ended Monday’s session 1.68% higher at ₹465.

Note To Readers

Disclaimer: The views and investment tips expressed by investment experts on CNBCTV18.com are their own and not that of the website or its management. CNBCTV18.com advises users to check with certified experts before taking any investment decisions.