Lenskart Solutions Ltd Q2 FY2026 Concall Summary

Key Takeaways

• Volume-led 24% growth, margin transformation intact: Revenue grew 24% YoY on 24% eyewear unit growth, while EBITDA margin reached 19.8%, up 1,150 bps from FY23, driven by vertical integration, operating leverage, and marketing efficiency.
• Market creation thesis is working at scale: 46% of eye tests were first-time users, and doubling store density in a postal code doubles the TAM in that postal code, with minimal cannibalization.
• International is tracking India's playbook, just faster: International pre-Ind AS margin swung from negative 4.3% in FY23 to 5.9% in H1 FY26, roughly 3 years behind India but with operating leverage kicking in sooner.
• Smart glasses mark a strategic pivot: The launch of "B" smart glasses on Qualcomm's AR1 chip transforms Lenskart from an eyewear company to an eyewear and data company, with in-house hardware, software, and AI.
• What to watch next quarter: Whether the September GST-anticipation softness fully normalizes, the pace of international margin catch-up, and early traction signals for the Meller brand and smart glasses.

Growth Engine: Volume, Density & Market Creation

• Volume, not price, drove the quarter: Eyewear units grew 24% YoY, matching revenue growth, while India same pin code sales grew 20% adjusted, indicating market share gains within existing geographies.
• Density creates demand, not cannibalization: Adding stores to a postal code doubles the TAM in that postal code; same pin code growth of 20% versus same store growth of 15% confirms limited cannibalization, a trend consistent with last year.
• First-time users are the growth flywheel: 46% of eye tests were first-time users converting latent need into active demand, validating the market creation thesis that removing friction expands the category itself.
• Tier 2 throughput outperforms metros: Throughput per store in Tier 2 is slightly better than in metros, driven by lower competition from professional opticians, lower rentals, and a larger population entering the category for the first time with a fresh multi-pair mindset.
• GST noise, not demand damage: Demand softened in September due to anticipation of GST rate revision, but this has more than normalized in October and November.

Peyush Bansal: "When you remove friction for the consumer, you don't just serve the market, you create it."

Margin Architecture: The Four Pillars

• Product margin reached 69.2%: Up from 64% in FY23, driven by scale and centralization of in-house frame manufacturing, which delivers a 35-40% cost advantage. International added approximately 1 ppt this period.
• Marketing costs fell to 7.5% from 9.7%: The reduction came not from cutting absolute spend but through brand pull and word of mouth, with India improving approximately 2 ppts YoY while international invested more.
• Store-level EBITDA is approximately 33%: Versus pre-Ind AS margin of 13.4% in India H1, the gap reflects the conversion power of the omnichannel model: 100 website visitors convert at 4-5 online, 20-30 with store assistance, and 35 with a home eye test.
• Other expenses added approximately 10 ppts pre-Ind AS over recent years: Incentives, commissions, and operating efficiencies have compounded, and growth and profitability show positive correlation, not trade-off.
• Product margin expansion will continue: In India, further improvement is expected from economies of scale, backward integration via the Hyderabad plant, and premium brands like Meller with inherently higher margins. International markets will see phased margin leverage as supply chains integrate.

Peyush Bansal: "I just want to reassure you, growth is our priority. In fact, I would say, volume growth is our priority."

International: India's Playbook, Compressed Timeline

• International pre-Ind AS margin reached 5.9% in H1: Up from negative 4.3% in FY23, with the turnaround driven by the same pillars established in India: supply chain integration, technology leverage, and brand pull.
• International is about 3 years behind India, but leverage is arriving faster: Operating leverage and profitability are kicking in sooner than they did in India, with Singapore and UAE established as market leaders, Saudi Arabia in early investment phase, and Japan and Thailand scaling.
• International gross margins are 10-11% higher than India: At approximately 75% versus India's 63-64%, and even higher in mature markets, this creates a large value proposition for customers while funding local investment.
• Demand tailwinds are structural: Myopia rates reach 80% in Southeast Asia and 83% in Singapore by age 18, existing solutions are expensive (kids' glasses cost hundreds of dollars), and demand is shifting toward D2C brands. Lenskart's centralized supply chain provides large price differentials.
• Supply chain integration is a hybrid model: India is the core supply chain for high-value activities, with last-mile localization. Singapore and Dubai are well integrated with unit economics similar to India; other markets are being integrated quarter by quarter.
• Kids category is a deliberate investment: In Singapore, average kids' glasses cost \$300-\$400; Lenskart's starting price for two pairs including lenses is \$50, targeting myopia rates of 60-70% by age 18.

Peyush Bansal: "I think it is even stronger than India in many ways."

Store Expansion & Geoanalytics Moat

• Targeting 450+ net store additions in India for FY26: Expansion is guided by a geoanalytics platform built over 7 years, tracking thousands of variables across 2,000+ stores, using mobility patterns, satellite imagery, and growth indices to select locations.
• 2,800 unserved pin codes identified in existing cities: Plus 2,000 new towns through the GeoIQ platform where dynamics are similar to existing towns, with Lenskart often the first retailer in a market now.
• 10-month payback is a prioritization tool, not a straitjacket: Growth and market share are the core goals; the geoanalytics refinement means store selection accuracy has improved materially.
• The platform is being scaled to international markets: Tango Eye for retail analytics is being exported to drive same-store growth abroad, replicating the India density playbook.
• The constraint is store proximity, not demand: The primary reason people do not shop at Lenskart is not having a neighborhood store in the vicinity, making density the binding growth constraint.

Peyush Bansal: "People will say, I don't have a neighborhood Lenskart store in the vicinity."

Product & Technology: Beyond Eyewear

• Smart glasses "B" is a category-defining move: Built on Qualcomm's AR1 chip with in-house hardware, software, and mobile app design, it enables hands-free calling, photos, real-time translation, AI assistance, food logging, and UPI payments, transforming Lenskart into an eyewear and data company.
• House of brands is taking shape: John Jacobs (premium fashion), Owndays (quality and value across Asia), Meller (fashion-forward sunglasses), and collaborations like Pop Mart address distinct consumer segments.
• Meller launched with overwhelming response: The premium brand with European design DNA carries inherently higher margins and was launched across India and the Middle East. Management sees Ray-Ban-like potential but stops short of forecasting it.
• AI is being embedded in operations and customer experience: An AI agent conducts most interview rounds today, an AI stylist launched on the app, and a lens replacement service for any brand's frames saw huge demand.
• Frame manufacturing is moving to India: In-house manufacturing saves at least 20-25% on cost, enables faster engineering innovation, reduces lead times, and improves working capital. The Hyderabad plant, 18-24 months away, will further improve logistics with its airport proximity.
• Capacity is planned to 3x over three years: A large capex cycle begins in December, with civil infrastructure representing about 20% of the investment and the remainder phased like the Bhiwadi plant.

Peyush Bansal: "Could Meller be to Lenskart what Ray-Ban is to Luxottica? I don't know, but the potential is certainly there."

Cost Discipline & Operating Philosophy

• Kaizen is embedded in daily operations: A dedicated commercial team and engineers search for efficiency in every corner, from box dimensions to packaging to trays, sustaining a cost advantage where Lenskart's retail price approximates competitors' wholesale cost.
• Pricing is cost-plus, not competitor-minus: Management is explicit that it does not price the competition; it prices based on cost structure and customer obsession, with BLU Lenses seeing the deepest price cuts even as GST came in.
• Logistics commitment is a cultural forcing function: The promise to deliver next day or credit 50% of the money back without a customer call drives 95-97% reliability, and the Hyderabad plant's airport proximity will take this further.
• NPS is the non-negotiable metric: The journey from 40 to 79 means every point above 70 takes more work than the last 10 points ever took, and management states this number supersedes even expansion decisions.

Peyush Bansal: "We run Kaizen every day that passes by, every quarter process engineering that we look at. We have a dedicated commercial team in the company and a set of engineers which are trying to find efficiency in every corner, every inch of a box to a packaging, to a tray..."

Guidance & Commitments

Key Metrics