Lenskart Solutions Limited — Q3 FY26 earnings call

The ASP growth largely came at the back of more Progressive. We invested a lot in digitizing our Progressive eye testing because this was an area we were still working on. And so, we worked on that and that allowed more people to buy Progressive from us. And then we have a premium share of lenses which is from our own brand Owndays which is the chain in Japan... Meller, to be honest, was not a part of this ASP increase yet because within I think within 2-3 weeks, it went off the shelf.

Clarifies the drivers of ASP growth (Progressive lenses, Owndays premium lenses) and confirms Meller was not a factor this quarter, indicating organic ASP improvement. Management states it's structural.

Asked by Garima Mishra

There is a significant increase if you see has come because of just increased eye test. We have accelerated the number of eye tests that we are doing. We were growing at about I think 45% odd in eye tests and that number in India now is 60% from maybe 50% last year approximately. So, we are accelerating eye tests in the process. Second, I think from a conversion perspective, we do deploy a lot of measurement around conversion of customers or traffic into the stores.

Details the reasons for the SSSG acceleration, primarily attributing it to increased eye tests (60% YoY) and improved conversion strategies, suggesting a structural rather than one-off improvement.

Asked by Percy

See, this is our first step in transitioning from an eyewear company to an intelligence company... We are not getting a product and retailing it and labelling it. We are actually building the ecosystem where we are capturing photos, videos, building the algorithm and then capturing that data and learning more about the consumer... We have 33,000+ stores, 20 million annual customers and the largest optometry network in the markets we operate. We are uniquely positioned to distribute smart eyewear at scale, whether it is our own or someone else.

Clarifies Lenskart's strategic approach to smart glasses, emphasizing ecosystem building, data capture, and leveraging its existing distribution and optometry network, rather than just hardware.

Asked by Vivek M

execution at scale is always sometimes understated. I think ensuring that customer experience remains intact and grows when we are opening so many stores, growing internationally, the risk is always stretching too thin... I think the centralized supply chain definitely helps in keeping that customer experience intact, the more it gets distributed, that comes under risk. But the system that scale is the only solution and retaining our customer experience is most important thing. Short term risks are also there, I would say there is a currency element that is involved in our business.

Reveals management's key concerns: maintaining customer experience during rapid expansion, potential strain on execution, and currency fluctuations.

Asked by Vivek M

See, in India, we are opening the top of the funnel. Majority of the eye exams we are doing are people who have never got their eye test done. They didn't know they needed correction before we made it accessible. So, the propensity to purchase immediately is naturally lower than in other markets... this number widening is actually a good sign, because this is a positive indication of market creation strategy.

Explains the discrepancy by noting that many eye tests are for first-time users who may not convert immediately, indicating a market creation strategy rather than a conversion issue.

Asked by Mihir Shah

A lot of scope here... In markets where we are there for longer, like Singapore and UAE, we have seen our margins grow beyond our total international average... As more supply chain integration happens, this margin will continue to grow. So, we definitely see a huge opportunity here. And yes, there is no reason for it to be 2x. There will be some marginal difference because of logistic cost, etc. But otherwise, this gap is going to diminish, and the cost will converge similar to India and keeping the same premium ASP.

Management confirms significant scope for international product margin improvement through supply chain integration, aiming to converge with India's margins despite some logistical differences.

Asked by Aditya Bansal

I haven't measured this in the same way. What I can tell you is that in Tier-2 what we definitely see is the demand is more for sure. Because the options that you have are more limited... My gut says it would largely hold true what you are saying, but we will get back to you offline on this.

Highlights management's acknowledgement of higher demand in Tier-2 due to limited options, but no specific data on acquisition cost efficiency, indicating an area for future monitoring.

Asked by Tejas Shah

See, churn is a very important number we and I think it is a key metric for us. And our Gold membership actually was designed many years back to address this... if we look at our 2-year repeat rate right now is about 98%. But that being said, consumers do churn. We have been investing a lot in AI based CRM and to make it more conversational.

Management acknowledges churn as a key metric and highlights Gold membership and AI-based CRM as strategies to address it, indicating a focus on customer retention.

Asked by Amit Sachdeva