Shares of Lenskart Solutions Ltd. experienced a notable decline of 5% in Monday's trading session, reaching a low of Rs 645. This sharp fall coincided with a substantial surge in trading volumes, which were reported to be 57 times their two-week average. The market activity is attributed to a significant block deal, with Alpha Wave Ventures LP identified as the likely seller.
Alpha Wave Ventures Sells Major Stake
Reports indicate that Alpha Wave Ventures LP was looking to offload up to a 1.6% stake in Lenskart. The floor price for this transaction was set at Rs 640 per share, representing a 5.6% discount compared to Friday’s closing price. Bloomberg reported that a total of 2.84 crore Lenskart shares changed hands during the deal.
According to CNBC-TV18, the initial offer involved 1.51 crore shares, equivalent to 0.9% equity, valued at an estimated Rs 950 crore. An additional upsize option allowed for the sale of an extra 1.13 crore shares, or 0.7% equity, valued at approximately Rs 724.60 crore.
Analyst Expectations for Q3 Performance
Despite the current stock movement, analysts anticipate a strong performance from Lenskart for the September quarter. Revenue growth is projected to exceed 30% year-on-year (YoY).
- JM Financial expects revenue to climb 30% YoY, driven by 31% growth in India and 27% in international markets. They also project a 190-basis-point YoY expansion in the Ebitda margin, with pre-Ind-AS Ebitda margin expanding by 200 bps YoY to 13.2%.
- Elara Securities forecasts 34% YoY revenue growth, fueled by increased volumes in both its Indian and international operations, alongside higher realizations due to a favorable base.
- Kotak Institutional Equities also estimates a 34% YoY revenue growth for the September quarter, with 31% growth in India and 30% in international markets. Kotak expects growth to be primarily volume-driven, supported by healthy store additions and strong same-store sales growth (SSSG). They model a consolidated gross margin of 69.6%, indicating a 60 bps YoY margin expansion, leading to a pre-Ind-AS Ebitda margin of 13.5%, a 270 bps YoY expansion.
At the segment level, Kotak estimates pre-Ind-AS Ebitda margins of 16.1% for the India business and 10.1% for the international business.