Event Participants
Executives
3 Peyush Bansal (CEO), Abhishek Gupta (CFO), Nikunj Mall (Head of IR)
Analysts
10 Amit Purohit (Elara Capital), Amit Sachdeva (UBS), Aditya Soman (CLSA), Arnab Mitra (Goldman Sachs), Avi Mehta (Macquarie Group), Devanshu Bansal (Emkay Global), Garima Mishra (Kotak Institutional Equities), Percy Panthaki (IIFL Capital), Tejas Shah (Avendus Spark Institutional Equities), Vivek Maheshwari (Jefferies)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| India Revenue | ₹1,531 crores | +30.7% YoY; broad-based growth across tiers with 30.7% growth and 18% coming from same-store sales |
| International Revenue | ₹1,203 crores | +38% YoY reported, +29% constant currency; broad-based across all markets and brands |
| Consolidated Revenue | ~₹2,734 crores | +34% YoY; driven by volume growth (eyewear units) rather than price |
| PAT | ₹228 crores | +182% YoY (vs. ~₹530 crores full year FY26); nearly tripled YoY |
| India EBITDA Pre-IND AS 116 | ₹236 crores | +51.5% YoY; margin 15.4% up 201 bps from 13.3% last year |
| International EBITDA Pre-IND AS 116 | ₹127 crores | +200% YoY (tripled last year); margin 10.6% vs. 4.5% last year |
| Consolidated Product Margin | 70%+ | Crossed 70% for first time after four quarters at ~69%; India 64.2%, International 77.1% |
| Eye Tests (India) | 63 lakhs | +42.7% YoY; remote optometry now in 786 stores vs. 168 at FY25 end |
| Eyewear Units (India) | 82 lakhs | +22.8% YoY; volume-led growth |
| Eyewear Units (International) | N/A | SSS-led IVR units +37.6%, transacting customers +27.8% |
| India Same Store Sales Growth (SSSG) | 18.3% | Broad-based across tiers; same PIN code sales growth 24% |
| Net Store Additions (India) | +116 stores | Opened 50 new cities; 455 net new stores in last 9 months (fastest expansion) |
| International Net Store Additions | +16 stores | Slight addition while revenue grew 38% — strong store-level productivity |
| Operating Cash Flow | ₹297 crores | 82% EBITDA to cash conversion; funded ₹75 crores store capex and ₹132 crores plant capex (Hyderabad), leaving ₹116 crores positive net inflow before M&A |
| ROCE | 23% | Improved from 14% last year on improved profitability and disciplined capital allocation |
| Marketing Spend (% of Revenue) | 4.8% | Improved from 5.7% last year, on brand pull |
| India Product Margin | 64.2% | Expanded despite currency headwinds; absorbing impact via in-house manufacturing and vendor negotiations |
| International Product Margin | 77.1% | Up on deeper supply chain integration of OwnDays and Meller |
Geographic & Segment Commentary
India: Revenue grew 30.7% YoY to ₹1,531 crores with EBITDA pre-IND AS 116 margin at 15.4%, up 2 percentage points. Eye tests grew 42.7% to 63 lakhs with remote optometry in 786 stores. Same-store sales growth of 18.3% broad-based across tiers, while same PIN code sales growth of 24% demonstrates that densification locks incremental demand. Net store additions of 116 (50 new cities) with 455 net stores added in last 9 months — the fastest expansion in company history.
International: Revenue grew 38% to ₹1,203 crores (+29% constant currency) with EBITDA pre-IND AS 116 margin crossing 10.6% for the first time (vs. 4.5% last year). Growth was volume-led with eyewear units up 37.6% and transacting customers up 27.8%, despite adding only 16 net stores. Core prescription business grew strongly (eye tests +20.5%) with sunglasses having a pronounced seasonal quarter (units +58.4% in April-June peak). OwnDays now one of Asia's most respected eyewear brands; Meller tracking to $170M+ brand (was $35M at acquisition). Singapore achieved 25%+ volume market share with successful dual-brand (Lenskart + OwnDays) strategy.
Company-Specific & Strategic Commentary
Market Creation / White Space: India has 78 crore people needing vision correction, heading toward 94 crores by FY30. Lenskart mapped 6,400 PIN code white space (June FY26); only 5% served — over 6,100 PIN codes remain unserved. Densification allows at least another 3,000 stores. India alone points past 10,000 stores. Average revenue per store in newly entered cities tracking at ₹18 lakhs per month.
Premiumization: Ondaze premium lenses now doing ₹1,500+ crores of prescription eyeglasses sales. Roenstock and Tokai (₹30,000+ price point progressives) doing roughly ₹250 crores annually. Management admitted it underestimated how fast customers would premiumize.
Value Segment — "Real Bharat": Hustler Club launched ₹500 glasses (with lenses and warranty included), onboarding largest-ever customer cohort. Management noted it took too long to crack ₹500 price point — customer was ready but costs weren't; now profitable. India market democratization parallel drawn to telecom.
AI / Self Eye Test: Self eye test entered pilot stores, built on one of India's largest recorded eye test datasets. AI-powered test designed to scale beyond optometrist constraints (India trains only few thousand optometrists per year). Remote optometry scaled from 168 stores (FY25 end) to 786 stores.
Be by Lenskart: Live with 80,000+ signups; manufacturing scaling with a few hundred glasses shipping daily; iterating weekly on consumer feedback.
Manufacturing & Supply Chain: Hyderabad facility capex of ₹132 crores in Q1. Hyderabad plant expected to improve backward integration and cost structure further. Brand licensing + manufacturing arrangements with Roenstock and Tokai (expanding to international markets).
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| India Store Potential | 10,000+ stores | Based on 6,100 unserved PIN codes white space + 3,000 more from densification. Management acknowledges supply (not demand) is constraint. |
| Store Expansion Pace | Acceleration planned (international) | "Maybe not this year, but plans getting made in some markets" (Peyush Bansal); current pace 455 net stores in last 9 months in India. |
| International Margins | Continued YoY improvement | Q1 FY27 at 10.6% vs 4.5% YoY; FY26 full year was ~7%. Management would not give specific FY27 target: "Our endeavor will be to continue to improve on year on year numbers" (Abhishek Gupta). |
| AI Self Eye Test | Scaling from pilot | Entered pilot stores; expected to unlock faster store expansion, particularly Tier 2/3. |
| Hyderabad Plant | Ramping | Will improve insourcing, product margin, and cost structure; no specific timeline provided. |
Risks & Constraints
| Risk | Context |
|---|---|
| Currency Headwinds | Product margin absorbing currency impact as of now via in-house manufacturing and vendor negotiations; management acknowledges "short term headwinds could still be there if the currency worsens further." Natural hedge exists with significant non-INR revenue. |
| Talent & Culture at Scale | Peyush explicitly said talent is the biggest worry — "When organizations become large, we need to ensure we can operate with that agility, speed." Engineering talent leveraging data/AI is the constraint to growth. |
| NPS / Service Quality | Temporary dip in NPS due to policy confusion communicated on social media; management says clarified and NPS "bouncing back almost where it was originally." No specific numbers shared. |
| Tier 2/3 Execution Risk | Serving tier 2 requires logistics (re-engineered air+train+bus ecosystem), manpower hiring, training, and SOP compliance. Remote optometry was biggest unlock; AI eye test expected to further enable. |
| Cannibalization from ₹500 Entry | Addressed via omnichannel journey (face scan detection to prevent duplication) and house of brands strategy to prevent down-trading of existing consumers. |
Q&A Highlights
Store Expansion & Same Store Sales Growth
- Question: How will same-store sales behave as you go from 2,700 to 10,000 stores? Will SSSG come under strike? (Avi Mehta, Macquarie)
- Answer: (Peyush Bansal) Market penetration in India only ~35% and growing (kids' myopia, progressive segment share gains). Previously served only ₹1,000+; now added ₹500 products and ₹10,000+ frames — new cohorts of customers. "Key here will be supply — how can we do more eye test, reduce wait time... We are launching RFID in all products." Older stores are large base contributing to 18% SSSG; same quarter last year was 16% — acceleration, not deceleration.
Currency Impact on Product Margin
- Question: Does the strong gross margin mean currency concerns are not elevated? (Avi Mehta, Macquarie)
- Answer: (Abhishek Gupta) Significant revenue in non-INR provides natural hedge on P&L. Offset currency impact via in-house frame manufacturing, volume-based vendor discounts, product mix. "Short term headwinds could still be there if currency worsens further." Hyderabad plant and insourcing will further help.
Store Expansion — What Will It Take?
- Question: Given Retail IQ and GeoIQ, can store addition pace pick up from current level? (Vivek Maheshwari, Jefferies)
- Answer: (Peyush Bansal) "Serving Tier 2 is not just about planting the store. It's a muscle that needs to be built." Remote optometry biggest unlock (786 stores now). AI eye test will take optometrist reach to "completely different level." Logistics re-engineered for Tier 2 (air+train+bus ecosystem). "The opportunity is there... but our focus remains on delivering the same customer experience in tier one, tier three."
Premiumization & ₹500 Engineering
- Question: How do you define premium products and how did you crack the ₹500 price? (Vivek Maheshwari, Jefferies)
- Answer: (Peyush Bansal) Premium defined as: lenses above ₹3,500 (where global brands operate), frames above ₹5,000 (John Jacobs, Meller, OwnDays), ₹30,000+ for super-premium progressives. ₹500 required solving: manufacturing in India (biggest bottleneck), logistics optimization, omnichannel customer acquisition. "We look at profitability net of customer acquisition cost, not just product margin."
SSSG, NPS Moderation
- Question: SSSG, SPSG, NPS all moderated this quarter — common thread? Has NPS improved post-quarter? (Tejas Shah, Avendus Spark)
- Answer: (Peyush Bansal) Policy communication confusion on social media caused NPS dip; clarified and "NPS is bouncing back almost where it was." On SSSG: "Same quarter last year 16%, now 18% — I actually see acceleration. With 25% SPSG and 18% SSSG, we are gaining market share in these markets."
Biggest Constraint to Vision
- Question: Product, real estate or talent — which worries you most? (Tejas Shah, Avendus Spark)
- Answer: (Peyush Bansal) Talent. "Talent and culture, the speed of operation. The engineering problems needed are of a very different level." Self eye test and remote optometry are examples of bottlenecks being solved.
International Margins by Geography
- Question: Can you rank Japan, SEA, Middle East in terms of margins vs. 8.6% TTM? (Tejas Shah, Avendus Spark)
- Answer: (Abhishek Gupta) "Parents don't rank the kids." Thailand adding many stores, Middle East doubling down — these have early-stage India economics. Singapore, Japan have better economics due to maturity. (Peyush Bansal) "Unit economics model is very similar. The playbook is no different than India."
Progressive Lenses Opportunity
- Question: What's the opportunity in progressive lenses and capabilities needed? (Amit Sachdeva, UBS)
- Answer: (Peyush Bansal) ₹250 crores is only super-high-end brands (Roenstock/Tokai), not total progressive. Playbook same as single vision — engineering test, marking, fitting. Launched home-based progressives with own R&D; AI enables lower design costs. "Honda's progressive lens has higher customer satisfaction than even the most expensive lenses we sell today."
Brand Building / Vanity
- Question: What above-the-line spend supports brand-building? (Amit Sachdeva, UBS)
- Answer: (Peyush Bansal) "Authenticity is taking over legacy." Ondaze at ₹1,500 crores is one of largest lens brands. Meller is only ₹5,000 (assuming ₹5,000 for two sunglasses implicitly stated) but Virat Kohli wears it in every match; Blackpink wears Meller. "Next generation is more about authenticity than superficial upgrading."
International Store Sweating
- Question: International store count up 10% while revenue +30% CC — how much more can you sweat stores? (Garima Mishra, Kotak)
- Answer: (Peyush Bansal) India history: opened 100 stores/year while building model (GeoIQ+Tango) to deliver consistent SSSG. International following same playbook — accelerating eye tests, rationalizing capex, increasing supply chain integration (margins from 73-74% growing). "Opening stores is easiest thing... most difficult is sustained same-store growth." Japan — high penetration but market shifting from expensive traditional opticians to D2C; "phenomena is great learning for India, headway is pretty long."
Eye Test → Purchase Conversion
- Question: What % of eye test users don't buy immediately, and what % of purchases come with outside prescriptions? (Percy Panthaki, IIFL)
- Answer: (Peyush Bansal) "Significant majority of people who do an eye test end up buying glasses, if not immediately in the few months to follow." As first-time eye tests grow (market creation), conversion temporarily dips — customers take longer, may explore other options. "That is why it's such a big investment in remote and self-eye test." No specific percentages shared.
International Margin Seasonality & FY27 Outlook
- Question: FY26 full year margin was higher than Q1 — is that fair for FY27? (Percy Panthaki, IIFL)
- Answer: (Abhishek Gupta) Q1 is seasonally stronger due to sunglasses (higher net margin business). FY26 was 7% vs prior year 3.6% — "you will continue to see year on year improvement." Would not comment specifically on full year target.
International Store Acceleration Timing
- Question: Are international margins now at stage where store expansion can significantly accelerate? (Arnab Mitra, Goldman Sachs)
- Answer: (Peyush Bansal) "Time is coming closer for international acceleration... maybe not this year, but plans getting made in some markets." Key constraint: tech integration (gross margin opportunity from 3x ASP with 2x cost) be seamless before opening stores at scale. "We have seen enough and more brands go down because of that."
International Store Potential — Different Approach vs India?
- Question: Do you think of store potential differently internationally since you're not creating market? (Arnab Mitra, Goldman Sachs)
- Answer: (Peyush Bansal) "Eyewear is a neighborhood model. I have not seen that different in any market." UK Specsavers has thousands of stores. GeoIQ acquisition now being applied to map international markets' geo-analytics. "PIN code sector is a way for our shareholders to understand top-down; when we open a store, we look at what GY2 (GeoIQ) is pointing to."
Remote Optometry Accuracy
- Question: How are you tracking accuracy of remote optometry eye tests? (Devanshu Bansal, Emkay Global)
- Answer: (Peyush Bansal) "Accuracy of an eye test has not been defined yet" — subjective process (responses change run-to-run). Remote optometry is "far more consistent than closed room unmonitored eye test." Uses Tango Eye (computer vision company) monitoring steps via CCTV scoring, plus correlation with returns/exchanges for power changes. Self-AI test gives same result every time — where end goal lies.
₹500 Entry Cannibalization
- Question: How do you ensure existing consumers don't down-trade to ₹500? (Devanshu Bansal, Emkay Global)
- Answer: (Peyush Bansal) Engineered omnichannel journey — face scan on app prevents duplicate purchases; house of brands (different brands/positioning for different segments) stops cannibalization. "Combination of journeys, technology, and house of brands."
₹500 Impact on Profitability
- Question: If ₹500 eyewear expands significantly, drag on profitability? (Aditya Soman, CLSA)
- Answer: (Peyush Bansal) "Unit economics work — lower price points are actually more margin accretive and higher price points have higher absolute money." ASP fluctuates quarter-to-quarter with campaign/base effects; track volume. "At unit economic level, no challenge — we solved for that before we launched it."
Roenstock/Manufacturing Arrangement
- Question: Is Roenstock brand licensing or something deeper? (Aditya Soman, CLSA)
- Answer: (Peyush Bansal) "We are both manufacturing and brand licensing partners." Lenskart manufactures in its factory with raw materials/design info from brand; in some cases imports directly. Started India-only but "now expanding into international markets one by one."
International Brand Strategy — OwnDays vs Lenskart
- Question: Medium-term — how do you position OwnDays vs Lenskart internationally? (Amit Purohit, Elara Capital)
- Answer: (Peyush Bansal) Strategy differs by market. Singapore dual-brand worked extremely well (25%+ volume market share); Lenskart operates as platform brand, OwnDays as D2C brand. Following same strategy in Thailand — working well. Japan: not currently planning dual-brand. "Strategy is evolving market by market. Singapore is a huge success, Thailand turning out to be one."
Key Takeaway
Lenskart delivered a strong Q1 FY27 with consolidated revenue up 34% YoY, PAT nearly tripling to ₹228 crores (vs. ~₹530 crores full-year FY26). India SSSG accelerated to 18.3% with same-PIN-code growth at 24%, proving densification adds demand rather than dividing it. International turned a corner with EBITDA pre-IND AS 116 margin crossing 10.6% (4.5% YoY) — management states the profitability question mark is gone. Strategic pillars: market creation (78 crore Indians need vision correction vs. only 5% of 6,400 PIN code white space served), premiumization (Ondaze ₹1,500+ crores; ₹30,000+ progressives ₹250 crores), and value (₹500 Hustler Club now profitable). New capabilities — self-AI eye test pilot, Be by Lenskart (80,000 signups), Hyderabad plant ramping — are positioned as unlocking the 10,000+ store India potential. Key watch points: currency headwinds, talent at scale, NPS recovery, and whether international store acceleration (planned but "maybe not this year") can replicate India's playbook in markets like Thailand and Japan.