Lenskart Solutions Limited — Q2 FY26 earnings call

Call held 4 Dec 2025

Management summary

Lenskart reported strong Q2 and H1 FY26 results, driven by robust revenue and EBITDA growth, with significant margin expansion. The company emphasized its technology-led market creation strategy, particularly in India and expanding international markets. While growth remains the priority, profitability is improving due to vertical integration and operating leverage. Management addressed concerns regarding GST impact and store payback, and committed to resolving a product quality issue.

Highlights

  • Q2 FY26 Revenue (like-for-like) increased 24% YoY to ₹2,146.6 crores.

  • Q2 FY26 EBITDA (like-for-like) grew 34.5% YoY to ₹425.8 crores, with margin expanding to 19.8% from 18.3% in Q2 FY25.

  • Q2 FY26 PAT increased 50% YoY to ₹113 crores, with margin at 5.3% up from 4.4% in Q2 FY25.

  • H1 FY26 PAT grew 98.1% YoY to ₹193.7 crores, representing a 4.6% margin.

  • India business grew 24.7% in H1 with a 19.5% EBITDA margin, and international business grew 26.1% in H1 with an 18.2% EBITDA margin.

Concerns

  • Management could not immediately reconcile a discrepancy in implied ASP figures for 2H FY25 vs 1H FY26, promising to follow up.

  • An analyst reported a personal experience of headache from Lenskart's blue block lenses, raising a product quality concern.

Key financials

2 periods

Q2 FY26

  • Revenue
    ₹2,146.6 Cr
    YoY +24%
  • EBITDA
    ₹425.8 Cr
    YoY +34.5%
  • EBITDA Margin
    19.8%
  • PAT
    ₹113 Cr
    YoY +50%

H1 FY26

  • Revenue
    ₹4,178.8 Cr
    YoY +25.3%
  • EBITDA
    ₹790.8 Cr
    YoY +37%
  • PAT
    ₹193.7 Cr
    YoY +98.1%

What they filed

Q1 FY27: revenue up 30.5%, net profit up 45.2% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue1,081 1,006 1,022 1,168 1,229 +14%1,381 +37%1,470 +44%1,524 +30%
EBITDA162 104 99 201 223 +38%252 +142%285 +188%298 +48%
Net profit107 37 20 104 99 −7%109 +195%164 +720%151 +45%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

SegmentGrowthEBITDA MarginPre-Ind AS Margin
India Business (H1 FY26)24.7%19.5%13.4%
International Business (H1 FY26)26.1%18.2%5.9%

Capital allocation

high confidence
  • Capex Capex disclosed
    • Building civil infrastructure for Hyderabad plant (20% of total capex)
    • Machinery for Hyderabad plant (remaining 80% of total capex)
    • Manufacturing frame in India (saving 20-25% on cost)
    Yes. See, overall, I want to mention that our capex is divided into two parts. There is a structural capex of building civil infrastructure, which is not the majority part of capex. It is a relatively smaller percentage of the capex. And because we are so positive on the latent demand that is coming into both India and international. It is better to invest in it ahead of time because it takes approximately 2.5 years for the infrastructure to come up. And then the machinery, which is the larger part of the capex is normalized and invested in closer to how we see the demand coming up. That being said, right now, we are investing in Hyderabad, but as we speak, our Bhiwadi utilization is already at 64%. Our Hyderabad plant is still about 18 to 24 months away. By that time, this utilization will go up further. And that is when this plant would come in. I do want to iterate that through these factories, we are not just creating backward integration. We are actually taking customer experience to the next level and which is what is driving this growth and which I mentioned about in the market creation. Today, we are delivering in 58 cities next day through one factory in Bhiwadi, right. And as we see, when we move from four day to one day, the demand that got unlocked was very, very massive for us. Because even sitting in the same city, people were not able to do that. Our overall investment in Hyderabad is also to create that customer experience right now. It is not necessarily to say that every dollar needs a capex investment, we have capacity right now. But right now, we have to think about long term, we are just scratching the surface, but it is, I know we have capacity, but at the same time we have higher demand than the capacity we will create we have in the next few years. Yes and look we are looking to expand in the next three years, 3x of the current capacity, which will in anticipation of the growth that we are seeing. So, this is an upfront investment. Yes and it is in a phased manner. Civil infrastructure, if I am investing a dollar, it is about 20% of that dollar, 20 cents of that dollar, remaining of that happens in a phased manner like we did in Bhiwadi. So, I think we feel quite comfortable about it. I just want to add to this, one of the things that we are also doing increasingly now is moving frame manufacturing into India. And that we see we are able to manufacture in India and save at least 20%, 25% on the cost when we do it in India and our ability to do engineering innovation is much higher, our lead time reduces, so working capital also becomes better.
  • M&A Meller Acquisition · Integrated

    Acquisition of Meller, Geolo, and Dealskart reflected in reported financials; Meller acquisition led to capitalization of goodwill and intangibles.

    Reported financials reflect acquisition of Dealskart, Meller and Geolo from their respective transaction closing dates. Goodwill and intangibles capitalized as part of purchase accounting for Meller.

    Reported financial statements reflect acquisition of Dealskart, Meller and Geolo from their respective transaction closing dates. Pro forma financial statements present the financials as if the acquired business had always been a part of the company and hence represent a clearer business trajectory. This is the goodwill and intangibles that we have capitalized as a part of our purchase accounting for the Meller brand.

Guidance & targets

Store Count

  • Net store additions in India Store Count · FY26 · High confidence more than 450
    For the full year FY '26, we are targeting more than 450 net store additions in India.

    — Peyush Bansal

Capacity

  • Manufacturing capacity expansion Capacity · next three years · High confidence 3x of the current capacity
    Yes and look we are looking to expand in the next three years, 3x of the current capacity, which will in anticipation of the growth that we are seeing. So, this is an upfront investment.

    — Abhishek Gupta

What to watch in Q3 FY26

ASP Reconciliation

next quarter
Current Unclarified discrepancy between 2H FY25 and 1H FY26 implied ASPs.
Target Clarification and reconciliation of ASP figures.

Why it matters

Ensures transparency and accuracy of reported financial metrics, which are crucial for investor confidence and modeling.

Why don't we check that again and maybe towards the end of the call, if we can get an answer?

Risks & concerns

  • Product Quality (Blue Block Lenses)

    medium

    An analyst reported experiencing headaches from Lenskart's blue block lenses, raising concerns about product quality for a key offering.

    Analyst acknowledged

Q&A highlights

7 direct
Growth vs. Margin Focus Direct
I just want to reassure you, growth is our priority. In fact, I would say, volume growth is our priority. So, I would say, the operating leverage is coming from fundamental pillars in the business, one of which is also the Lenskart brand. It is not coming at the cost of growth.

Management clarifies that growth, particularly volume growth, remains the primary focus, and margin expansion is a natural outcome of fundamental business pillars, not at the expense of growth.

Asked by Vivek Maheshwari

GST Impact and Demand Trends Direct
What we have seen is this has more than normalized in October and November. In fact, I would say because we passed the GST benefit to the consumers, we have seen a very, very strong demand coming from consumers in a category like ours.

Management provides an update on the impact of GST rate revision, noting a temporary softening in September followed by strong demand recovery in October and November due to passing benefits to consumers.

Asked by Vivek Maheshwari

10-Month Store Payback and Online vs. Offline Sales Direct
We are not fixated on 10 months, to be honest. I think we prioritize growth and market share... Our runway is therefore not just about capturing share in a fixed market. It is about two powerful vectors of market creation.

Management explains that store expansion is driven by data analytics and market creation, not just a fixed payback period, and physical stores are crucial conversion points even with increasing online influence.

Asked by Vivek Maheshwari

ASP Trends Discrepancy Partial
The currency impact that I have is about 8% to 9%. The remaining, I am not able to... Correlate the numbers. We will just check. We will get back to you.

An analyst identified a significant discrepancy in implied ASP figures between periods, which management could not immediately explain, indicating a need for further clarification.

Asked by Ayush Rastogi

International Growth and Supply Chain Integration Direct
Our international markets are relatively new. Over the last few years, the vertical integration has been progressively increasing. We run a hybrid approach where India you would assume, I would say is the core of supply chain and then the last mile is local.

Management details the strategy for international markets, highlighting the phased integration of supply chain with India as the core, and local last-mile operations.

Asked by Shrenik Bachhawat

Future Capex and Capacity Expansion Direct
our capex is divided into two parts. There is a structural capex of building civil infrastructure, which is not the majority part of capex... It is better to invest in it ahead of time because it takes approximately 2.5 years for the infrastructure to come up.

Management clarifies the nature of capex, distinguishing between structural infrastructure and machinery, and explains the strategic decision to invest upfront in long-lead-time infrastructure like the Hyderabad plant.

Asked by Shrenik Bachhawat

Tier 2 Store Performance Direct
the availability of more high quality and professional opticians in Tier 2 is relatively lesser than what you see in a metro and a Tier 1. And there is, in fact, even a larger set of population which is coming into the category for the first time in these markets as we go increasingly there.

Management explains the strong throughput in Tier 2 stores by citing lower competition for quality opticians and a large segment of first-time users entering the category in these markets.

Asked by Mihir Shah

Blue Block Lens Quality Direct
Thank you, Pallavi. Thanks for the feedback. I will be in touch with you. Thanks for sharing this feedback. We do take this very seriously. We invest actually in the whole science of our blue block lenses from material to monomer to coating is done by our R&D team.

A direct customer complaint about product quality (blue block lenses causing headaches) was raised, and management responded seriously, promising personal follow-up and emphasizing R&D investment in the product.

Asked by Pallavi Deshpande

3 min read 6 chapters

Detailed narrative

Market Opportunity and Vision Correction Drive

Lenskart is focused on addressing a significant market opportunity in vision correction, with an estimated 750 million people in India needing correction. In H1 FY26, the company conducted 9.3 million eye tests in India, marking a 47% year-on-year increase. Notably, 46% of these were first-time users, indicating successful market creation by making eye testing accessible. This initiative aligns with Lenskart's mission to transform India into a 'vision capital'.

Technology as a Core Enabler for Growth

Technology is a fundamental pillar of Lenskart's strategy, with over 500 engineers driving innovation. The AI platform 'Geol' utilizes over 3000 variables to optimize store locations, ensuring disciplined expansion and low paybacks. Remote eye testing is implemented in over 500 stores in India and Japan, enhancing efficiency and quality. A centralized, AI-led supply chain enables next-day delivery in 58 cities and even same-day delivery in some, demonstrating technology's role in creating a 'compounding effect' for sustained profitable growth.

Strong Financial Performance in Q2 & H1 FY26

For Q2 FY26, Lenskart reported a like-for-like revenue of ₹2,146.6 crores, up 24% YoY. EBITDA reached ₹425.8 crores, growing 34.5% YoY, with the margin expanding to 19.8% from 18.3% in Q2 FY25. PAT for the quarter was ₹113 crores, a 50% YoY increase, representing a 5.3% margin. For H1 FY26, revenue was ₹4,178.8 crores (up 25.3% YoY), EBITDA was ₹790.8 crores (up 37% YoY with an 18.9% margin), and PAT was ₹193.7 crores (up 98.1% YoY with a 4.6% margin). The company's EBITDA margin has significantly improved by 1,150 basis points over three years, from 8.3% in FY23 to 19.8% in Q2 FY26.

Strategic Geographic Expansion and Market Densification

Lenskart's expansion strategy combines geographic reach into unserved pin codes (identifying 2,800) and densification within existing markets. This approach has shown that adding stores does not lead to cannibalization but rather expands the total addressable market. In H1 FY26, the company added 203 net new stores in India and aims for over 450 for the full FY26. The international business also demonstrated strong growth of 26.1% in H1, achieving an 18.2% EBITDA margin by leveraging India's operational capabilities.

Product Innovation and Brand Ecosystem

Lenskart is actively building a platform for a new generation of eyewear brands, including John Jacobs for premium fashion, Owndays for quality and value, Meller for fashion-forward sunglasses, and collaborations like Pop Mart. The company prioritizes affordability and accessibility over competition-driven pricing. Furthermore, Lenskart is innovating with smart glasses ('B') that offer features like hands-free calling, AI assistance, and digital integration, aiming to transform into an 'eyewear and data company'.

Enhanced Customer Experience and Loyalty

Customer experience is a central focus, reflected in an improved Net Promoter Score (NPS) from 70% in FY23 to 79% in Q2 FY26. AI is integrated throughout the customer journey, from eye testing and frame recommendations to supply chain optimization. The company's proprietary logistics system ensures high reliability (95-97%) for next-day delivery, backed by a commitment to refund 50% of the order value if delivery timelines are not met, fostering strong customer loyalty.

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