Lenskart is another Paytm. Here's why.

Lenskart's revenue growth slowed to 17% in FY25, with Net Profits not mentioned at all. And despite that, the company is looking at a $10B (~₹85,000 Cr) valuation as it goes public. This has to be some kind of a sick joke.

In FY23, the company had made a loss of ₹63 Cr at a revenue of ₹3,788 Cr. In FY24, there was ₹10 Cr loss at a revenue of ₹5,427 Cr. The net was ALWAYS negative, but atleast the company had a growth rate to speak of. 43%. In the latest FY, even that has moderated to 17%. So where's that $10B valuation coming from?

The PR game is on steroids, even though the net figures aren't disclosed at all. But let's say Lenskart reveals a net profit of about ₹200 Cr at a revenue of $755M (~₹6,415 crore) in FY25. How does it make Lenskart worth $10B? This valuation implies a revenue multiple of 13x, and a P/E multiple of 425x! In what world does that make sense?

Let's take Lenskart's peers in comparison. There's EssilorLuxottica, Warby Parker in the west. And then Titan Eye+ here in India. What are their multiples?

Essilor is a mature, global giant. A literal cash machine. It has brands like Ray-Ban & Oakley, is a license maker for folks like Chanel & Prada, owns stores, sells wholesale, and also dominates lenses (which are the high-margin part of the eyewear business). In the last FY, Essilor did $30B+ revenues with ~$4B in profits (net) at 60–65% gross margins.

What's its market cap? ~$130B. So what's the revenue multiple (of Lenskart's biggest peer)? 4x. What about the P/E multiple? 48x.

Now some can say maybe it's because Essilor is a mature company growing at 6%. Lenskart is growing faster, so it perhaps deserves better multiples. Now even though there are atleast 10 factors in Essilor's favour to counter that, let's just fuck it for now.

Let's talk about Warby Parker. Lenskart's true peer in the West due to its D2C, more online than offline nature.

Warby did a revenue of $771M in FY24 (as compared to $671M of Lenskart). Like Lenskart, Warby also posted a slight loss in FY24, and is looking at a small profit in FY25 (its Q1 of FY25 was profitable at net). And finally, Warby is projected to show a revenue of $880M in FY25, at a growth rate of ~15% (which is exactly what Lenskart showed just now).

What's Warby's market cap? $2.8B. So what's its revenue multiple? 3.3x.

At this point, some could say let's just leave Essilor and Warby behind, and compare Lenskart with something like Titan Eye+. Because India is a unique market. Unfortunately, that'll be a stretch as Titan Eye+ isn't a standalone company (it's a part of a large group).

But. If you look at Titan, which is a cash machine on steroids, doing revenues of about $7B with roughly $500M in net profits every year, with growth of 37% YoY AT THAT SCALE.

What's its market cap? $36B. And hence the revenue multiple? 5x. What about P/E ratio? 76x.

That's for Titan, with all that scale, growth and real profits to show for.

Now when you think about Lenskart. With a revenue multiple of about 13x, and a P/E multiple of 425x. Does it make sense? No. It DOES NOT.

This is unbelievable. This is preposterous. This is another Paytm.

Average Aakash beware.

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