IPO Deep Dive: Lenskart Solutions Analysis

​​​Lenskart Solutions Ltd., a market leader in the organised eyewear market, has filed its DRHP with SEBI. The company aims to raise Rs 2,150 crore through a fresh issue, along with an offer for sale of up to 13.23 crore equity shares.

Finology Research Desk has analysed the company this week, providing a clear verdict on its IPO. Find out in this article.

What makes the eyewear industry special?

Source: DRHP

The Indian eyewear industry was valued at USD 9.2 billion inFY25, and is projected to grow at a CAGR of  ~13% reaching USD 17.2 billion by FY30, driven by rising refractive errors among teenagers and children, changing lifestyles, an ageing population, increasing disposable income and fashion consciousness, as well as technological advancements.

Source: DRHP

Prescription eyeglasses dominate the market with nearly 73% share by value, followed by sunglasses at 22% and contact lenses at 5%. 

Source: DRHP

The overall eyewear industry remains largely unorganised, accounting for 76% market share as of FY25, while organised players hold just 24%. However, this balance is gradually shifting, and by FY30 the organised share is projected to rise to 31%, backed by efficient supply chains, competitive pricing, skilled in-store professionals, consistent quality, wider product range and an omnichannel customer experience.

The demand for fashionable prescription eyeglasses is growing fast. What was once seen purely as a medical need is now treated as a lifestyle choice and a fashion statement. This change is being driven by the rise of social media, the push of influencer marketing, and the expanding reach of organised retailers that blend online and offline shopping.

Source: DRHP

The traditional eyeglasses supply chain was highly fragmented, with multiple intermediaries such as manufacturers, importers, and distributors, resulting in inefficiencies and higher costs. Orders were handled offline through retailers, relying on manual lens cutting and decentralised inventory systems, which often led to inconsistencies. Today, the industry has transformed through digitisation. Direct-to-consumer (DTC) brands have streamlined the supply chain by eliminating middlemen, integrating omnichannel access, driving both online and offline reach and implementing automated production. These advancements have reduced costs, sped up delivery times, and made products more accessible and affordable.

Business Model of Lenskart Ltd:

Founded in 2010 by Peyush Bansal, Lenskart is a direct-to-consumer (D2C) eyewear company. It is engaged in the business of designing, manufacturing, and selling a wide range of eyewear products. The company operates centralised manufacturing facilities in India (in Bhiwadi and Gurugram), Singapore, and the United Arab Emirates, with additional production in China through a joint venture. Its product portfolio includes prescription eyeglasses, frames, lenses, sunglasses, and contact lenses, catering to diverse customer needs across style, functionality, and price segments. As of March 31, 2025, the company operates 2,723 stores globally, including 2,067 in India and 656 in international markets.

Source: DRHP

Revenue Mix of Lenskart Ltd:

 

Source: DRHP

Lenskart reported a revenue of ₹6,652 crore in FY25, with around 60% coming from the Indian market and 40% from international operations, reflecting a balanced revenue mix across geographies.

The revenue breakdown is as follows:

• Sale of Goods (95.61%): This comprises Income from selling eyewear products such as spectacles, sunglasses, contact lenses, and related accessories through both online and offline channels. 
• Sale of Services (1.98%): This includes earnings from value‑added services such as subscription plans, fitting charges etc.
• Other Income (2.41%): This includes revenue from non‑core activities like lease income, website license fees (charges collected from franchise stores for using Lenskart’s online platform and software to manage orders and stock), sale of scrap, etc.

Unit Economics of Lenskart Ltd.

 

Source: Finology Research Desk

Cost of goods sold (COGS), the largest component of Lenskart’s expenses at 30.5%, increased 20% from Rs 1,776 crore in FY24 from Rs 2,134 crore in FY25. However, as a percentage of total income, these costs have remained relatively stable, ranging from 30% to 32% over the past three years.
 

Employee benefit expenses rose 27% from Rs 1,086 crore in FY24 to Rs 1,378 crore in FY25. But as a share of total income, these costs have remained stable at around 19% to 20% over the past three years, slightly higher but justified given the customer-facing nature of its store operations.

Finance costs increased from Rs 123 crore in FY24 to Rs 146 crore in FY25, marking an 18% increase. The rise was mainly driven by an increase in interest on lease liabilities due to their store expansion during FY25. However, their borrowing declined 21% from Rs 268 crore in FY24 to Rs 212 crore in FY25,

Depreciation and amortisation expenses rose 18% from Rs 672 crore in FY24 to Rs 796 crore in FY25. However, as a percentage of total income, they have remained stable at around 11% to 12%, indicating the increase in absolute terms is attributed to higher capital expenditure during the year.

Other expenses rose 14% from Rs 1,891 crore in FY24 to Rs 2,163 crore in FY25. These include marketing, repair and maintenance, logistics, etc. However, as a percentage of total income, it has been declining from 37% in FY23 to 31% in FY25.

Tax expenses rose 1.26% from Rs 69 crore in FY24 to Rs 88 crore in FY25. With the effective tax rate remaining at around 25% in line with prevailing corporate tax norms.

After years of losses, the company reported its first net profit in FY25 at Rs 297 crore, with a net profit margin of 4.24%.

Porter’s Five Forces Analysis of Lenskart:

Source: Finology Research Desk

1. High bargaining power of buyers: Customers have many choices when it comes to eyewear, ranging from local opticians to organised players like Titan Eye+, GKB opticals etc. Switching costs are low, and buyers are highly price-sensitive, often comparing styles, quality, and after-sales service before purchase. This wide availability of alternatives increases buyer power, compelling Lenskart to continually focus on competitive pricing, product variety, and an exceptional shopping experience to retain customer loyalty.
2. Moderate bargaining power of suppliers: Lenskart sources a large part of its raw materials, including metal wires, transparent resin granules (small, clear plastic particles used for manufacturing), packaging materials, and finished products from outside India, with about 42% coming from China. This dependence exposes it to risks such as supply chain disruptions and geopolitical tensions. At the same time, its scale gives it stronger negotiating power to secure favourable terms, which limits supplier influence. Taken together, the bargaining power of suppliers remains moderate.
3. High competition in the industry: The Indian eyewear industry remains largely unorganised (76%) and highly competitive, with thousands of local opticians competing against large brands such as Lenskart, Titan Eyeplus, Specsmakers, and GKB Opticals. Lenskart leads the organised segment with its scale, technology, and supply chain control, but rivalry stays intense as both organised and unorganised players compete aggressively.
4. Moderate threat of substitutes: While glasses and contact lenses remain the primary solutions for vision correction, LASIK and other refractive eye surgeries act as substitutes. These procedures remove the need for eyewear, but adoption in India is still limited due to high costs, surgical risks, and eligibility constraints(not all patients qualify medically). While glasses and contact lenses remain the primary solutions for vision correction, LASIK and other corrective eye surgeries act as substitutes. These procedures remove the need for eyewear, but adoption in India is still limited due to high costs, surgical risks, and medical eligibility barriers. Still, as awareness rises, LASIK poses a moderate long-term threat to the eyewear industry.
5. Moderate threat of new entrants: The eyewear industry has relatively low barriers to entry, as small optical shops and startups can begin operations with limited capital. However, scaling up to Lenskart’s level requires heavy investments in technology, supply chain, and brand building. Features like virtual try-ons and an omnichannel model are not easy to replicate, making the overall threat moderate.

Pros and Cons of Lenskart Ltd:

Pro’s:

Market Leadership: Lenskart is the leader in India’s organised eyewear segment, supported by 2,067 retail stores and a strong online presence. Its omni-channel approach ensures a seamless customer experience across offline and digital channels, while its integrated model removes middlemen, avoiding price markups of 2.7-4x, and its large scale of 27.20 million units sold in FY25 further strengthens its cost edge. This has helped Lenskart maintain a 70% gross margin on its products in FY25.

Strong customer loyalty: With a repeat order rate of 98.16% in FY2023, the brand demonstrates exceptionally high customer loyalty and satisfaction. Its technology-driven solutions, extensive product range, and consistent service experience encourage customers to return for multiple purchases. 

Con’s:

Concentration on the People’s Republic of China: About 42.21% of Lenskart’s raw materials and finished products are sourced from the People’s Republic of China, creating a heavy single-country dependence. This makes the company vulnerable to external shocks, geopolitical tensions or regulatory changes which could disrupt its operations or raise input costs.

The Bottom Line

Lenskart has established itself as the leading player in India’s organised eyewear market, channelising its omnichannel model, technology-led services and strong manufacturing. While its rapid expansion in both Indian Tier-2/3 cities and international markets strengthens its brand presence, the company continues to face challenges from high operational and marketing costs and intense competition in the industry. With its IPO around the corner, will Lenskart be able to sustain its profits in the long run? What are your thoughts?