Lenskart Solutions Ltd (LENSKART) Q2FY27 Concall Transcript - Sep-2026 Qtr
Moderator: Ladies and gentlemen, good evening and welcome to Lenskart Q2 FY27 earnings conference call. To present the results, we have with us, Mr. Peyush Bansal, co-founder and Chief Executive Officer, Mr. Abhishek Gupta, Chief Financial Officer, and Mr. Vaibhav Sachdeva, Investor Relations. Please note that this call is being hosted on Zoom with the presentation on display. For participants who would like to view the presentation alongside the discussion, please join via the Zoom link shared in advance. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, you may use the chat option to interact with the moderator. Please note that this conference is being recorded. I now hand the conference over to Mr. Vaibhav Sachdeva, Investor Relations from Lenskart. Thank you and over to you.
Vaibhav Sachdeva (Lenskart Solutions Ltd): Thank you. Good evening, everyone, and thank you for joining Lenskart's earnings call for the second quarter of fiscal year 2027. Before we begin, I would like to remind you that some of the statements we make today maybe forward-looking in nature and are subject to risks and uncertainties. The conference call may contain forward-looking statements about the company, which are based on the belief, opinion, and expectations of the company as on the date of this call. These statements are not a guarantee of future performance and involve risks and uncertainties that are difficult to predict. We have uploaded our quarter two results and a detailed shareholder letter on our website and to stock exchanges. Please note that consistent with our IPO prospectus, the numbers we present today
Vaibhav Sachdeva (Lenskart Solutions Ltd): impact exists only in the prior-year comparatives Q2 fiscal '26 and H1 fiscal '26. We will begin today's session with opening remarks from Piyush and Abhishek. During this time, everyone will be on mute. Following the presentation, we will open up for Q&A. With that, I would like to hand over to Piyush.
Peyush Bansal (Lenskart Solutions Ltd): Good evening, everyone, and thank you for joining us. As always, we are grateful for the trust you place in us, with your capital and with your eyes. The size and depth of the vision care problem are far greater than we can imagine. Last quarter, I touched upon this, and numbers this quarter only reinforce our belief in the scale of the problem and opportunity. To begin with, let me take you through the key financial highlights of the quarter. Revenue grew 32.5% year-on-year to 2,845 crores. EBITDA grew to 624 crores, a 46.6% jump year-on-year. EBITDA pre-Ind AS grew 65%, twice as fast as revenue, with margin expanding from 11.1% to 13.8%. PAT more than doubled to 232 crores. For the half year, revenue of Rs. 5,559 crores increased 1.3x year-on-year. EBITDA pre-Ind AS increased 1.8x year-on-year to 753 crores. PAT of 461 crores is already 87% of the whole of FY '26. And on a trailing 12-month basis, we have now crossed 10,000 crores of revenue, 2,200 crores of EBITDA, 1,300 crores of pre-Ind AS EBITDA, and close to 800 crores of PAT on 40 million eyewear units. Like I always say, measure us over years, not quarters. Behind the financials, this quarter, we conducted 80 lakh eye tests globally, up 40% year-on-year. In India, around 70 lakh, that is 78,000 Indians a day. Units grew 27.1% year-on-year. We added 165 net new stores globally, taking the network now to 3,624 stores. In Quarter 2, India delivered same-store sales growth of 20.8%, with same-pincode growth of 27.1%. We have said too little about Hustlr Club, a face scan on the app and a complete pair, frame, lenses, and warranty all for Rs. 500. Lakhs joined this quarter, many owning glasses for the first time. It is one of the ways how we hope the next 100 million Indians find us. Also, this quarter, Lenskart Gold crossed 1 crore active members in India, up 39% year-on-year, with 73 crores of Gold fees collected in the quarter, up 55% from last year. It is the quietest and most powerful thing we are building. Our brands are also learning to speak the culture. This quarter, we have launched John Jacobs with Masaba. We also launched Shoonya, which brings Indian classical music into a frame, a beautiful collection, right down to details inspired by the sitar and flute. We brought brought it to life with Sounds of Shoonya, 10 artists across five evenings, including classical vocalists, sitarists, and popular musician duo, the Barksdale Siblings. In Singapore, we launched a Game of Thrones collection, from the iconic emblems of the Great Houses, temples shaped by swords and armor to the three words every fan knows, Winter is Coming. Every detail of that world is captured on the frame. And this week only, we have launched John Jacobs with designers Shantnu & Nikhil. If you look closely, you would see the intricate detail, the S&N mark on the frame, a thin metal line along the temples, and their signature navy and cherry red colors tucked into the hinges.
Peyush Bansal (Lenskart Solutions Ltd): And now the number we watch most closely, our Net Promoter Score. Opening a store a day while holding our standards is hard. India NPS, as you are aware, dipped to 77.6 in June. But we assured you that we have been working hard to get back to our NPS levels. I'm happy to share with you that in this quarter it is back at 79.6. That recovery, on a ship this size, is what we're proudest of this quarter. Last quarter we told you Indian India has not got its glasses yet. By 2030, 94 crore Indians will require glasses and this is the goal. It is why we say India needs at least 10,000 plus Lenskart stores. It is only fair that we tell you what kind of company it will take to change that and show you where we are on building it. We believe it needs four things this industry never had. First, it will be an engineering company. The hardest problem in eyewear, the eye tests above all, will not be solved by hiring more or spending more. 100 million pairs a year needs 80 million eye tests. So we are engineering the eye tests, Remote Optometry now in 934 stores and also Drish, the AI-assisted eye test, is in pilot. Similarly, one needs engineering for myopia control lenses, just-in-time manufacturing, supply chain, and more. Second, it will own its supply chain end-to-end. That is why that is the only way to make a Rs. 500 pair profitably and give it the experience of a Rs. 15,000 one. A complete pair at that price is the only possible is only possible when the frame, the lens, the fitting, and the store are all ours. And I believe in time, the same will be true for smart glasses too. Third, it will build brands people want to wear, brands that speak to culture for everyone at every price. The same platform that gives India Hustlr also gives it John Jacobs, Meller, and Owndays. That range is not a side effect of the model, it is what makes it work. The Hustlr brings the volume that keeps the factories running at scale, and that scale lets us make a designer pair to the same standard standard at a compelling price. And fourth, it will never believe its customers are satisfied enough. It will keep innovating and keep surprising them. That is the company we are trying to build. It is easier said than done. It has to push harder, think like founders and builders, and change as fast as the world. If one word holds all four, it is evolve. We named our new concept store Lenskart Evolve for that reason. It opened in Utopia City, Worli, Mumbai, on a belief that the future of eyewear will be shaped not just by the products we create, but by how people discover and experience them. It brings design, culture, and technology into one immersive space, the first expression of what an eyewear destination and the Lenskart brand can aspire to. Walk in, spend an hour, and you'll get a flavor of the culture we're building and the bar we hold ourselves to, raising the standard, refusing the status quo, thinking from first principles. With that, let me hand over to Abhishek for the segment results.
Abhishek Gupta (Lenskart Solutions Ltd): Thank you, Piyush. Good evening, everyone. Let me first talk about the India business. India revenue grew 35.3% year-on-year to 1680 68 crores. First-half revenue grew 33% to 3,199 crores. And as we keep saying, in our business, growth and profitability are positively correlated. EBITDA pre-Ind AS 116 reached 267 crores, up 61.5% from last year, which translates to a margin of 16%, up 2.6 percentage points from 13.4 that we did last year. Product margin was 64% against 63.4% last year, and most of the gains from in-house manufacturing were actually consumed by the rupee depreciation against this quarter. In terms of operational highlights, India eye tests grew 44%.
Abhishek Gupta (Lenskart Solutions Ltd): to 70 lakhs with remote optometry now live in 7 in 934 stores, up from 303 a year ago, powering the volume led growth. Eyewear units up 26.5% to 86 lakhs. The same-store sales growth was 20.8%, up from 14.8% a year ago, broad-based across the tiers. Same pin code sales growth of 27.1% ran 6 percentage points ahead of the SSG. Densification continues to add demand, not divide it. We added 143 net new stores, 94 in tier-plus towns, entering 61 new cities, taking us to 2,868 stores as of 30th September. Now coming to international business, international revenue grew 29.5% to 1,201 crores and about 23% growth in constant currency terms growth across all our markets. EBITDA pre Ind AS 116 reached 127 crores, up 87% from last year, which translates to a margin of 10.6%, up from 7.3% last year. Product margins expanded to 77.1% versus 75.5% last year on deeper supply chain integration of Owndays and Meller and higher sunglasses mix. Growth was volume led and largely same-store led. Eyewear units grew 29.7% and transacting customers were up 22.7% with 22 net new stores added during the quarter. Sunglasses grew strongly, led by Meller and a flat sequential revenue after Q1 seasonal peak is the normal shape of the year. Now coming to cash flows, operating cash flow was 388 crores for the first half of the year after working capital built up as inventory was rebuilt ahead of the festive season, like we had indicated in our quarterly earnings report. This funded the store capex of 187 crores for the 297 net new stores that we added, and after including the 108 crores of other income and inflows, covered the plant and other capex of 297 crores, leaving net cash inflow of 12 crores before M&A. Return on capital employed was 22.5% for H1 of the year versus 19% last year and 14.6% for full year FY '26. Improving profitability and disciplined capital allocation is evident in the numbers. With that, let me hand back to Peyush.
Peyush Bansal (Lenskart Solutions Ltd): Thank you, Abhishek. One question comes up in our investor conversations lately more often than any other, why we believe a 25% EBITDA pre-Ind AS margin is possible in the long-term. This quarter, we have added a note on this in our letter. Let me also take you through it here. Our margin comes from one thing above all,
Peyush Bansal (Lenskart Solutions Ltd): China, and now also in Thailand. In-house frames went from 44 lakh units in FY23 to 78 lakh units in FY26, a 20% CAGR. And we're
Peyush Bansal (Lenskart Solutions Ltd): has now stepped up to a different pace. This quarter we manufactured 72% more frames from last year. Every frame moulded in India no longer moves with the dollar. And every step we bring in house is one less margin we pay outside. Owning the mould and the process was the first leg. Tooling and plating comes next. More of it in house, and more of it in India. And the mould cost for peace keeps falling with scale. Similarly, lens manufacturing. Progressives, complex powers, premium coatings, including own days premium lenses, we now make more and more of them in India. In-house lenses went from 21 lakh units in FY23 to 56 lakh units in FY26. And 52% more this quarter than a year ago. Some of these India made lenses already reach our international markets. Making more of lenses in-house, sending more of them to our international markets, manufacturing sun lenses and more are big opportunities ahead. Similarly, a pair has to be made-to-measure. It does not have to be made by hand in a shop. Nearly every pair Every India pair is made centrally in Bhiwadi or Manesar. And Bhiwadi runs at 75% automation. Fitting, quality control and packaging are still largely manual, and that is the header. Scale is the biggest lever. On top of it, fit automation, robotics, and premaking the most common pairs in bulk, data tells us what will be ordered. Hyderabad, built for 50 million pairs a year under one roof and around 12 months from commissioning, takes all of this to the next level. We own the stores and the customer relationship. The retail margins is ours, and so is every eye test on record. That record trains our technology. Since stores team and rent are largely fixed, large part of the same store growth flows through. India rent fell to 5.7% of revenue from 6.1% with same-store growth of 20.8%, running well ahead of roughly 5% annual cost escalations. Add better conversion and more efficient marketing, and more of that growth becomes profits. And now we do not just make a pair cheaper, we make it better. Airframes weigh almost nothing and do not break, and customers pay a premium for that comfort. NightDrive lenses went from lab to store in months. Myopia management lenses for children are a category we are building. Because we are direct to customer, each of these is designed to what customers actually need. We have only just started here, but we believe R&D will become one of the largest generators of both value and profit in the long term. And seven, we are building a company that can make 100 million pairs a year and run 10,000 stores increasingly through systems and automation. Being an engineering company at heart, we build the entire operating system ourselves. Our stores run our run on our own point-of-sale, our eye test machines on our own software, our factories on our own software, Nexus, replenishment on Argus, site selection on GeoIQ. This year CRM, call handling and talent acquisition, outsourced for years, also came in-house. And Owndays and international are moving on to the same platform. The more runs on one system, the more powerful it gets. AI is not a separate project here, it is how we run the business. That is the path to 25%. There is still more to build in every pool, and every pool we deepen makes the others worth more. But to be clear, we have a small percentage of the global eyewear market. Growth always comes first. Profitability is running ahead of where we expected it to be, and we intend to use that room. More marketing in the right places, more of Bharat, and scaling international while the unit economics play out. We will not put a time frame on 25%, read our margins over years, not quarters. The quarterly numbers might move. The direction will not.
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